can we settle out of court and how do we formalize our agreements?
how can you formalise your agreements?
Many couples reach agreements privately and without involving lawyers or the Court in reaching such agreements. There are many advantages in reaching an agreement about property and finances.
In this article we will briefly look at the benefits of settling without fighting in Court, we will discuss how you can formalize your agreements and look at how to apply for Consent Orders. We will also discuss financial agreements and look at how you divide your superannuation after the breakdown of your relationship.
Let’s first look at why you should try and settle without going to Court.
Reaching your own agreements about property and finances offer many advantages:
- It is your own decisions
- You know exactly what you agree on; if you go to court you have to wait for the judicial officer to make a final determination.
- Your communication with your former partner might improve and future disputes can possibly be resolved in a similar way, and
- Your future relationship as parents, if you have children, will probably be much better
- You will save a lot on legal fees and reduce emotional stress significantly, and
- You will save time if you can settle without going to Court
- You should be able to move forward quicker and start a new life for yourself
From the many advantages mentioned above, it is quite clear that there are many reasons why settling outside of Court might be a good approach. Once you've reached certain agreements, you can formalise the terms of your agreements.
- You and your partner can either agree on a Financial Agreement, or
- You can apply to the Court for a Consent Order. This means that you ask the Court to make legally binding financial orders based on your agreements.
It is a good idea to seek legal advice before you file your application. Your lawyer can explain how the law applies to your situation and help you to understand your rights and obligations under the different options.
The Family Law Act 1975 provides that parties to a marriage (Sections 90B-90KA) or a de facto relationship (Sections 90UA-90UN) can enter into a legally binding financial agreement about their financial matters should the relationship or marriage breakdown. Sometimes people refer to these financial agreements as 'pre-nuptial agreements.
It is important to remember though that you can enter into a financial agreement before, during or after a marriage or de facto relationship.
Take note: The Act only allows for financial agreements between de facto couples if the parties ordinarily reside in one of the following areas when the agreement was made:
- South Australia
- The Australian Capital Territory
- The Northern Territory
You and your partner can agree on the following to be included in your Financial Agreement:
- Financial settlements after the breakdown of the marriage or de facto relationship, including superannuation entitlements.
- Financial maintenance/support of one party by the other after the breakdown of the marriage or de facto relationship
- Any other issues related to the above
Yes, it is, if:
- Both parties have signed the agreement, and
- Both parties received independent legal and financial advice before signing the agreement
Section 90K (marriage) and Section 90UM (de facto couples) of the Family Law Act 1975 set out circumstances in which the Court can declare an agreement invalid and set it aside. The Court will only set aside an agreement if it is satisfied that the requirements set out in Sec 90K or Sec90UM are met.
A consent order is a written agreement between you and your ex-partner that is approved by the Family Court of Australia.
When you sign a draft consent order, you indicate that you agree with the terms of the order and will comply with the terms set out in the order. You and your former partner can then apply to the Family Court of Australia to make your agreement a Consent Order without you having to argue in Court.
Once the Court makes the Consent Order, it has the same effect as an order made by a judicial officer after a hearing process and each person affected by the order must comply with it.
You can agree on the following in a Property or Financial Order:
- Child support/maintenance
- Spousal maintenance to provide support for a former partner
- Splitting of superannuation
- Transfer or sale of property; and to agree on how your property, income and financial resources and debt should be shared with you.
The way your assets and debts will be divided will depend on your individual circumstances. Don't expect yours to be similar to others that you might have heard of.
The Court will only make a consent order if it is satisfied that the agreement is just and equitable.
You can file an application for a consent order any time after separation, but it should be filed within 12 months of a divorce, or 2 years after the breakdown of a de facto relationship.
Your Application can be filed manually at a family law registry. You need to have all the required documents signed and witnessed and photocopied before you file.
The Courts recommend that you file your application electronically. Besides being able to eFile a range of documents, it gives you access to information about your court file online 24/7.
Both ways you have to pay a filing fee unless you qualify for an exemption.
The Court will consider your application and the parties will be notified if the consent orders are made. If the orders are not made, you will receive notification as to why your orders were not made. If the orders were not made, you should seek legal advice on how to proceed.
Superannuation is treated as a different type of property in superannuation splitting law.
Couples who are separating can (it is not mandatory) value their superannuation and split the payments. Splitting does not convert it into a cash asset.
To divide your superannuation you have two options:
- You and your partner can enter into a formal written agreement, but both you and your partner must each instruct a lawyer who must provide independent legal advice, and sign a certificate stating that independent legal advice was given about the agreement.
- You can ask the Court for a Consent Order to split superannuation.
- If you and your partner cannot reach an agreement on dividing superannuation, you can seek a Court Order to split superannuation.
There are different types of superannuation and legislation sets out methods for valuing most types of superannuation. There are exceptions, including self-managed superannuation and where the Attorney General has approved that a fund can use a different valuation method.
You need to provide certain forms to the trustee of the superannuation fund to get information about the value of your superannuation.
You are eligible to apply for the information if:
- You are the member of the superannuation plan, or
- The spouse of the member, or
- A person who intends to enter into a superannuation agreement with the member.
You will find all the information and forms that you need in the Superannuation Information Kit. The forms include a:
- Form 6 Declaration, which includes a declaration that you are eligible to apply for the information.
- A Superannuation Information Request Form, and
- The Superannuation Information Forms
You need to include the fee charged for the information with your forms.
Once you have established the value of your superannuation, you need to decide on a method to split the superannuation.
You can enter into a formal written agreement, or you can obtain a Court order.
You can obtain a Court order by means of a:
- Consent Order, where you and your partner reached an agreement and you apply to the Family Court to make your agreement a Consent Order. You don’t have to attend at Court.
- Alternatively, if you can’t reach an agreement, you can apply for a Court Order as a result of a hearing process. You will then need to attend the Court hearings.
Take note: If you are seeking any court orders about superannuation you need to inform the trustee of the superannuation fund about the orders that you are seeking. It is called ‘procedural fairness’ and the trustee must be provided with an opportunity to attend the court hearings and object to any orders that you are seeking.
Once an order is made, by consent or hearing, the trustee must be provided with a sealed copy of the order.
Do you need legal advice if you and your partner agree?
It is always good to seek legal advice before you finalise any agreements. A lawyer with experience in family law will know the law and can explain how the law applies to your situation and what will be fair and just in the eyes