Family Law Property Settlement

What are your settlement options when you and your ex are amicable and can reach an out of court agreement?

Consent Orders

You could finalise your property and parenting matters by way of so-called Consent Orders. Consent Orders are court orders agreed by the parties and approved by a court as fair and reasonable.

To file for Consent Orders, you and Scott would need to file an Application for Consent Orders disclosing all of your assets and liabilities; and file draft Consent Orders for the court’s approval.

When finalising the relationship, you may obtain:

1)       Consent Orders for Property (Financial) Matters – so long as the financial arrangements both you and your ex agree to are in accordance with considerations in the Family Law Act 1975 (Cth) (‘the Family Law Act’).

2)       Consent Orders for Parenting Matters – so long as the arrangements both you and your ex agree to are in the best interest of your children and in accordance with considerations in the Family Law Act.

Binding Financial Agreements

An alternative to Consent Orders is a binding financial agreement.

A binding financial agreement (BFA) allows parties to secure final and legally enforceable arrangements with respect to property away from the direct scrutiny of the court. The court, however, can make orders for enforcement of a binding financial agreement. So, although a BFA is not filed in court and its terms are not approved by a court, it can be made legally binding.

The effect of a BFA is to oust the jurisdiction of the court to make an order in accordance with its views about what is just and equitable.

However, importantly, both you are your ex would be required to seek independent legal advice prior to signing of the BFA.

Informal Settlement

Finally, if you did not wish to formally finalise your property matters, you may reach an informal agreement with your ex. However, such an agreement would be legally unenforceable. In addition, if you decided not to pursue a formal property settlement, the following risks would apply:

  • The door would remain open for either party (you or your ex) to come to court, in the future, to apply for a formal settlement.
  • If you or your ex did apply, all the property (or debt) of both parties – regardless of whether it was acquired before or after separation, would be counted towards the property settlement pool for distribution, no matter in which party’s name the assets were held. Assets that would be counted include real estate, cars, superannuation, business assets and holdings, inheritances, damages awards and savings. Debts would include gambling debts, new loans, new credit card balances or tax debt.
  • The relevant date for valuation of the assets and assessment of the position of the parties would be, not the retrospective date of separation, but the date of the hearing (which may be years again down the track after the initial application to the court). There could be a great deal of travel in people’s financial circumstances in this timeframe.
  • Although a formal property settlement must normally be applied for within 12 months of divorce (not separation) in case of married couples or 2 years after separation in case of de-facto relationships, a party could apply for permission to bring a property settlement “out-of-time” if they could show that they have suffered hardship and could provide a reasonable excuse for the delay. If permission to apply out-of-time was given, then the full scope of family law about property settlement would kick into gear.

Notwithstanding that a drastic change in circumstances may not seem likely, in the absence of a property settlement there could be no certainty for either party that they have been financially separated.