We have agreed on our property settlement, what do we do now?
The end of a relationship is often a very emotional and stressful time for all parties involved. Reaching an agreement between yourself and your former partner, can assist in reducing the financial costs and emotions involved during an uncertain time.
Whilst you and your former partner may have agreed on the division of your assets and liabilities, it is important to ensure that your agreement is legally binding.
By simply making an agreement between yourself and your former partner, does not make this informal agreement legally binding on either of the parties and there is a significant risk that the other party may be successful in a claim for a property settlement in the future.
There are two ways that your agreement can be legally finalised by way of:
- Consent Orders; or
- A Binding Financial Agreement.
A Consent Order is a written agreement that is entered into by mutual agreement.
Consent Orders are filed with the Federal Circuit and Family Court along with an Application for Consent Orders, which sets out relevant information the court requires in order to assess whether the proposed orders are ‘just and equitable’.
The Court will then make the proposed orders if they are satisfied that the orders are just and equitable for both parties.
Consent Orders may deal with
- Splitting of superannuation;
- The sale or transfer of properties; and
- Children’s issues.
A financial agreement is a written document that states how your property is to be divided and can be arranged before, during or after a de facto relationship or marriage. The Financial Agreement does not have to be approved by the Court; however a Financial Agreement is a very complex document and there are very strict rules surrounding the agreements.
The Financial Agreement can deal with financial settlement, financial support and any incidental issues of the parties.
It is important to formalise your agreement for several reasons, including:
- If the other party doesn’t carry out the terms of the agreement, then you can enforce it by filing an Application in Court;
- If you do not have a formal agreement in place and your circumstances change, for example you inherit a significant sum of money, your ex-partner may file an Application in Court for a property settlement in the future (provided it’s within the statutory time limits*);
- You can easily divide the parties’ superannuation;
- The parties can avoid paying stamp duty charges where the transfer of property is involved.
*The important time limits to consider are one year from the date of divorce (if you are married) or two years from the date of separation (if you were in a de facto relationship).
Make a time to speak to one of our experienced family lawyers who can walk you through all the steps you need to take to make the right choices for yourself and your family. Contact Book Now to arrange an appointment, the first half an hour is free.