It is important that any property settlement is properly documented in order to give you financial certainty and closure.
The two options are as follows:-
- Firstly, obtaining Final Property Orders via consent through an administrative process (provided there is agreement about same) or obtaining Orders after litigation in the Federal Circuit Court or Family Court.
- Secondly, through documenting the agreement privately through a Financial Agreement (also known as Binding Financial Agreements).
These options are available to all couples whether they are married, de facto or same sex couples.
PRELIMINARY LEGAL ISSUES
For married couples, any Application for Property or Financial Orders is required to be filed with the Court within 12 months of the date of a Divorce. Applications filed after the date of 12 months from Divorce require the leave of the Court to proceed.
It is important to note that Application for Property and Financial Orders by Defacto and same sex couples need to be filed within 2 years from the date of the breakdown of the relationship. Applications filed after the expiration of 2 years will require the leave of the Court in order for same to proceed.
WHAT THE LAW LOOKS AT
The first and preliminary step is to determine whether any property adjustment is appropriate or whether each party should retain their assets, liabilities and superannuation entitlements without claim by the other party.
In the event that a property adjustment is considered appropriate four steps are then undertaken to establish each party’s entitlements.
Four Step Approach:-
- A determination is made as to all assets, liabilities and superannuation entitlements (as well as financial resources).
- A determination is made as to each party’s contributions towards the acquisition, conservation and maintenance of each party through their financial and non-financial contributions.
- An examination then takes place in relation to the future needs of both parties including ascertaining the care of children and earning capacity.
- The last stage is for the settlement or Court Order if determined by a Judge to ensure that the outcome is just and equitable at law.
No two cases are ever the same. Each case is unique and is dealt with on its own merits after a careful analysis of all relevant factors.
DUTY OF DISCLOSURE
Each party has a duty to fully and frankly disclose all of their assets, liabilities, superannuation and financial resources.
A failure to do so can have serious implications which can include the setting aside of Orders at a later date.
FINALITY AND CLOSURE
Whilst it is possible for parties to enter into private arrangements between themselves without obtaining a Court Order or entering into a Financial Agreement, those agreements are not binding.
Therefore there is always the risk without a Court Order or Financial Agreement that the other party may seek to renegotiate a property settlement unexpectedly.
As a result, it is false economy not to formalise a settlement properly in a legally binding way.
We can discuss with you the costs associated with finalising your arrangement through Consent Orders (obtained through an administrative process) or entering into a private Financial Agreement.