You and your former partner have shared a life together. This may mean that together you have:
- shared assets and liabilities, such as property, savings accounts, credit cards and mortgages;
- made financial contributions towards the relationship, such as wages and salary or business profits; and
- made non-financial contributions, such as caring for children and homemaking duties.
Dividing relationship assets can be a complicated process and only an experienced family lawyer can advise you on the law.
There are three ways to divide property
Generally, parties separating have three options:
- apply for consent orders by coming to an agreement as to property division and any contact with children of the relationship;
- formalise a financial agreement; or
- mediate / litigate through court.
Consent orders divide property and finances between separating couples with finality. They require approval of the Family Court and achieve a clean financial break. They are generally viewed as the most legally-sound avenue of formalising a financial separation.
The benefit of consent orders is that parties gain certainty that the agreement they reach is binding and enforceable. Consent orders also mean that any informal agreements that may be open to misinterpretation or misunderstanding cannot be litigated and also have the effect a a party cannot renege.
A breach of consent orders may give rise to penalties for the breaching party including contempt proceedings.
An application for consent orders needs to be made to the Family Law Court of Australia within:
- 12 months of your divorce; or
- 2 years of the breakdown of your de facto relationship.
If you miss the time limitation, you will need to seek leave from the court to make your application. This means that you will need to ask for the court’s permission to consider the consent orders. While this can sometimes be possible, it is another legal hurdle which can cost you unnecessarily.
A financial agreement is an alternate, less formal, way of formalising a property settlement by way of a contract between you and your former partner. This document can outline how property will be divided between the parties, how superannuation should be split (if at all) and may include terms regarding spousal and child maintenance. In that regard, parties to a financial agreement are contracting out of legal rights to have the Family Court make a determination on property and financial matters. For that reason, independent legal advice is imperative and lawyers acting for either party must sign a certificate with respect to the provision of comprehensive legal advice to their respective clients.
The other requirements of financial agreements are:
- they must be signed by all parties;
- legal advice (as referred to above) must be obtained prior to signing;
- the parties must make full and frank disclosure;
- there must be no circumstances of duress or pressure in relation to one party’s signing of the agreement;
- there must be no fraud by a party;
- the terms of the agreement must reflect the parties’ factual circumstances and intentions;
- the terms of the agreement must satisfy the law of contract and the prescriptive rules in the Family Law Act 1975.
In the event that you and your former partner are unable to come to an agreement, the Family Court and the Federal Circuit Court have alternative dispute resolution procedures to force parties to negotiate and mediate before litigation ensues. But, sometimes litigation is the only way to resolve a family law dispute and you should speak to us about a litigation strategy before starting proceedings.
Litigation can be expensive so your lawyer should be disclosing costs to you in an upfront way and you should understand the steps to litigation including how case conferences work, what directions hearings are and how parties are expected to conduct themselves when in court.
Speak to one of Dowson Turco’s family lawyers today to see what option might work best for you: (02) 9519 3088.
Author: Bryan Do, Lawyer, DTL Litigation Group