Which option is right for you?<\/p>\n
When a married or de facto couple<\/a> separates, it is usually necessary to also conclude their financial relationship with one another. To do this, there are several options that may be adopted, for example:<\/p>\n Many separated couples may not feel the need to formalise any agreement with regards to the distribution of their collective assets and liabilities. For example, in circumstances where the asset base is very small, or there is only debt to consider, or they would rather \u201cjust walk away\u201d. Alternatively, the parties may trust one another to honour any informal \/ non-legal agreement they reach, and feel confident and comfortable that neither will make any future claim on the other\u2019s assets in the months and years to come.<\/p>\n Needless to say, life continues to evolve, post separation. The potential impact of new relationships, further children, businesses booming, jobs lost, inheritances received, surprise lottery wins, serious ill-health, global pandemics and other unforeseen events may result in a once accepted arrangement no longer being desirable, reasonable or practicable.<\/p>\n Although informal agreements are the cheapest and likely quickest option, they provide little protection against the possibility that either party may change their mind in the future, and seek a different outcome to that which was originally agreed.<\/p>\n At the other end of the spectrum, litigating a property settlement should be considered a last resort, given the time, cost and distress that so often accompany contested court proceedings. We note that litigation of family law financial matters is beyond the scope of this article, which will focus on options for parties who wish to settle their property matters by formal agreement.<\/p>\n At ABKJ Lawyers, we specialise in assisting separated couples in formalising financial settlements efficiently and effectively. Whether you\u2019re looking to protect your assets or achieve a fair property settlement, we provide expert guidance tailored to your needs.<\/span><\/p>\n In a Family Law context, Consent Orders are orders that are made by the Federal Circuit and Family Court of Australia (\u201cCourt\u201d) in accordance with the Family Law Act 1975<\/em>. Consent Orders formalise the terms of an agreement reached by the parties to that agreement into a Court Order. Consent Orders are final, legally binding upon the parties thereto, and enforceable by the Court.<\/p>\n Consent Orders are only available to parties once they have separated. Consent Orders can cover a broad range of Family Law matters<\/a> including a division of property and superannuation<\/a>, as well as formalising parenting arrangements<\/a> for children of the relationship.<\/p>\n The parties\u2019 property interests that may be considered in a Consent Order include things such as real property (house, land, etc.) cash \/ savings, shares, personal property (cars, household contents, jewellery, collections etc.) superannuation, interests in businesses, and property held within Australia and overseas.\u00a0 Consent Orders may also include liabilities such as home loans, credit cards, taxation debts, finance owed to third parties, personal loans and the like.<\/p>\n In preparing an Application for Consent Orders, each party has a duty to provide full and frank disclosure of their financial circumstances to the other party. Each party has to sign a \u201cStatement of truth\u201d at the end of the Application for Consent Orders that the information they have provided in the Application is true and correct.<\/p>\n It is important that each party ensure they are satisfied that the other party has provided appropriate disclosure. Disclosure documents that are typically exchanged include things such as bank account statements, tax returns, pay slips, superannuation statements, statements of shareholdings, valuations of properties (if required) and the like.\u00a0 Failure to provide satisfactory disclosure can have serious consequences for the party who has not fulfilled their obligations.<\/p>\n Time limits apply for parties who want the Court to make orders in relation to their financial matters. For parties who were married, once they obtain a Divorce Order<\/a>, these parties have 12 months from the date of the Divorce Order<\/strong> to apply to the Court for orders regarding their property interests. If parties who were married do not get divorced, the Court\u2019s jurisdiction to consider an application with respect to an alteration of the parties\u2019 property interests continues indefinitely.<\/p>\n Parties who were in a de facto relationship have two years from the end of their de facto relationship <\/strong>to apply to the Court for Orders in relation to their financial interests.<\/p>\n After these respective time frames expire, the parties are \u201cout of time\u201d to apply to the Court for Orders about their property interests. However, the Court has discretion to grant a party leave to apply after the end of the standard application period if the Court is satisfied that hardship would be caused to a party or a child if leave were not granted. Satisfying the Court to consider an out-of-time application is not automatic, and should be avoided.<\/p>\n Contrary to how it may sound, Consent Orders can be obtained without either party going to Court. Once prepared and signed by each party, an Application for Consent Orders is filed electronically with the Court, and is usually determined by a Registrar of the Court, in the absence of the parties. The parties are notified when the Court has made the Orders.<\/p>\n Although it is not mandatory that either or both parties to a Consent Order engage a lawyer to assist them with this process, it is generally advisable that legal help is obtained, to ensure the documents are drafted correctly, and independent legal advice is received in relation to the effect of the proposed orders.<\/p>\n Once an Application for Consent Orders is filed with the Court, a hearing date will be appointed to consider the Application. Generally, the parties do not attend Court for the hearing.<\/p>\n In accordance with the Family Law Act, the Court may make any order it considers to be appropriate with regards to altering the property interests of each party to the marriage or de facto relationship.<\/p>\n Before making any order, the Court must be satisfied that, in all the circumstances, it is just and equitable<\/strong> to do so. The Court\u2019s assessment of each party\u2019s contributions and individual future needs is critical in determining whether the terms of the Consent Orders sought by the parties will be deemed to be just and equitable.<\/p>\n The requirement that a Consent Order be “just and equitable” means the court must be satisfied the proposed outcome is fair to both parties. This doesn’t necessarily mean a 50\/50 split. The court considers various factors, including:<\/p>\n The\u00a0Family Law Act sets out the general principles which the Court considers when deciding property settlement cases. In summary, the general principles are based on:<\/p>\n This step does not involve any assessment of \u201cfault\u201d with regards to the breakdown of the marriage \/ relationship.<\/p>\n If the Court is satisfied that the proposed Consent Orders are just and equitable in all of the circumstances, the Consent Orders will be made, and will thereafter be binding upon both parties. Once made, Consent Orders are final and enforceable by the Court.<\/p>\n Consent Orders are legally binding and enforceable by the Court. If a party fails to comply with the terms of a Consent Order, the other party can file an enforcement application with the court. The court can then take various actions to ensure compliance, such as ordering the party to pay a fine, sell an asset, or take other steps to fulfill their obligations under the order.<\/p>\n A Financial Agreement (also known as a \u201cbinding financial agreement<\/a>\u201d) is a private contract between two people that is made in accordance with specific provisions of the Family Law Act. Financial Agreements are available to parties whether they married or de facto.<\/p>\n If you need assistance or advice with a financial agreement on the Gold Coast<\/a>, please contact our experienced family lawyers on (07) 5532 3199 or\u00a0enquire online<\/a>.<\/p>\n As with Consent Orders<\/a>, the first pre-requisite for a Financial Agreement is that the parties have reached an agreement regarding their property and finances. Without an agreement, a Financial Agreement is not an option.<\/p>\n A key difference between Financial Agreements and Consent Orders is that Consent Orders are only available to parties upon the conclusion of their relationship. Financial Agreements, however, can be entered into before, during or after a relationship. For the purpose of this article, the focus is on Financial Agreements that may be obtained after separation<\/a> (including both married and de facto relationships).<\/p>\n As with Consent Orders, the parties\u2019 property interests that may be considered in a Financial Agreement include things such as real property (house \/ land etc.) cash \/ savings, shares, personal property (cars, household contents, jewellery, collections etc.) superannuation, interests in businesses and the like.<\/p>\n Financial Agreements can also provide for the maintenance of either of the parties and include liabilities such as home loans, credit cards, taxation debts, finance owed to third parties, personal loans and the like.<\/p>\n Unlike Consent Orders, Financial Agreements cannot seek to deal with or distribute property or financial resources that have been acquired by either or both of the parties after divorce (in the case of parties who were married) or after separation (in de facto relationships<\/a>).<\/p>\n Similarly to Consent Orders, parties to Financial Agreements must exchange disclosure of their total direct and indirect financial circumstances.<\/p>\n Parties who wish to enter into a Financial Agreements are not restricted by any time limits and can do so at any time.<\/p>\n If prepared and executed correctly, a Financial Agreement removes the Court\u2019s jurisdiction to deal with financial matters. For this reason, a Financial Agreement is not considered by the Court and is not subject to the Court\u2019s requirement that the proposed outcome be \u201cjust and equitable\u201d for the parties.<\/p>\n Notwithstanding this, the technical requirements for a valid Financial Agreement are set out in detail in the Family Law Act. The Financial Agreement must strictly comply with these requirements in order to be considered \u201cbinding\u201d.<\/p>\n Importantly, before signing the Financial Agreement, each party to the agreement must be provided with independent legal advice from a legal practitioner about the effect of the Financial Agreement on the rights of that party and about the advantages and disadvantages, at the time the advice was provided, to the party making the agreement. Each party must be provided with a signed statement by the legal practitioner stating that the requisite advice was provided to that party.<\/p>\n The Court retains its power to set aside a Financial Agreement on a number of grounds, such as:<\/p>\n Further, there is substantial case law that demonstrates that the Court will set aside a Financial Agreement due to errors in drafting and non-compliance with the requirements of the Family Law Act. In such circumstances, the Court can make orders adjusting the respective parties\u2019 property interests that may be quite different to the terms of the Financial Agreement entered into by the parties.<\/p>\n When the Court considers whether a “material change” in circumstances has occurred that would justify setting aside a Financial Agreement, it looks for significant unforeseen events that have a substantial impact on a party or a child. Examples of what\u00a0might\u00a0constitute a “material change” include:<\/p>\n It’s important to be aware of potential downsides to both Consent Orders and Financial Agreements:<\/p>\n Both Consent Orders and Financial Agreements can deal with the splitting of superannuation. The\u00a0Family Law Act\u00a0allows for superannuation to be treated as property that can be divided between parties.<\/p>\n While Financial Agreements are designed to be binding, they can be more complex to enforce than Consent Orders. If one party breaches a Financial Agreement, the other party may need to take legal action in court to enforce the agreement. The court will consider the terms of the agreement and the circumstances of the breach to determine the appropriate remedy.<\/p>\n In summary, some of the key differences between Consent Orders and Financial Agreements (entered into post-separation) include:<\/p>\n At ABKJ Lawyers, we understand that resolving financial matters after separation can be complex and emotionally challenging. Our experienced family law team provides practical advice tailored to your unique circumstances to ensure your rights are protected and your agreements meet all legal requirements.<\/span><\/p>\n Whether you choose Consent Orders or Financial Agreements, we guide you through every step of the process to achieve a fair and secure outcome.<\/span><\/p>\n When it comes to post-separation financial settlements, at ABKJ Lawyers it is our preference to assist our clients to obtain Consent Orders rather than Financial Agreements where possible. In our experience, Consent Orders are usually easier and cheaper to prepare, and provide our clients with the assurance that, once made, Consent Orders are deemed to be just and equitable by the Court, enforceable by the Court, and final in nature.<\/span><\/span><\/p>\n Contact us today or enquire online now!<\/span><\/strong><\/p>\n To receive specialised advice specific to your circumstances, please contact our office to arrange an initial consultation with a <\/span><\/span>family lawyer<\/a>.<\/span><\/span><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":"\n
Key Takeaways<\/h2>\n
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Consent Orders<\/h2>\n
Duty of Disclosure<\/h3>\n
Time Limits<\/h3>\n
Applying for a Consent Order<\/h3>\n
Filing an Application for Consent Orders<\/h3>\n
What Does “Just and Equitable” Mean?<\/h3>\n
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Enforceability of Consent Orders<\/h3>\n
WHAT IS A FINANCIAL AGREEMENT?<\/h2>\n
The Court\u2019s Power to Set Aside (Cancel) a Financial Agreement<\/h2>\n
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Specificity on “Material Change in Circumstances”<\/h3>\n
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Addressing Concerns and Disadvantages<\/h3>\n
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Superannuation Splitting<\/h3>\n
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Enforceability of Financial Agreements<\/h3>\n
Key Differences between Consent Orders and (post-separation) Financial Agreements<\/h2>\n
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Comparison: Consent Orders vs. Financial Agreements (table side by side comparison)<\/span><\/span><\/h2>\n
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\n Feature<\/span><\/th>\n Consent Order<\/span><\/th>\n Financial Agreement<\/span><\/th>\n<\/tr>\n<\/thead>\n\n \n Definition<\/span><\/td>\n Legally binding agreement approved by the court.<\/span><\/td>\n Legally binding private agreement between two parties.<\/span><\/td>\n<\/tr>\n \n Court Involvement<\/span><\/td>\n Requires court approval.<\/span><\/td>\n Does not require court approval to be initially valid.<\/span><\/td>\n<\/tr>\n \n Flexibility<\/span><\/td>\n Less flexible once approved.<\/span><\/td>\n More flexible; tailored solutions possible.<\/span><\/td>\n<\/tr>\n \n Cost<\/span><\/td>\n Court fees apply; legal fees likely.<\/span><\/td>\n Legal fees apply for drafting and advice.<\/span><\/td>\n<\/tr>\n \n Enforcement<\/span><\/td>\n Enforced by the court.<\/span><\/td>\n Enforced like any other contract.<\/span><\/td>\n<\/tr>\n \n Setting Aside<\/span><\/td>\n Limited grounds for setting aside by the court.<\/span><\/td>\n Can be set aside on broader contractual grounds.<\/span><\/td>\n<\/tr>\n \n Best For<\/span><\/td>\n Simpler situations; agreement already reached.<\/span><\/td>\n Complex situations; need for tailored solutions.<\/span><\/td>\n<\/tr>\n \n Public Record?<\/span><\/td>\n Yes, becomes part of court record.<\/span><\/td>\n No, remains private to the parties.<\/span><\/td>\n<\/tr>\n \n Stamp Duty\/CGT<\/span><\/td>\n Exemptions available<\/span><\/td>\n Exemptions available<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Why Choose ABKJ Lawyers?<\/span><\/h2>\n