There are two approaches to achieve this – consent orders or a binding financial agreement.This paper covers the differences between them and the advantages and disadvantages of each.
A Consent Order is an order made by the Family Court of Australia which documents an agreed division of matrimonial assets for marriage or de facto relationship.
A Consent Order is binding and enforceable. If the terms of the order are breached, an Application can be made to the Court to enforce the terms of the order. Either party’s lawyer prepare consent orders.
You do not have to obtain legal advice for a Consent Order to be filed or made by the Family Court of Australia.
However, it is strongly recommended that you obtain legal advice. The Courts will only make a Consent Order if it is fair, just and equitable. The absence of legal advice could be a reason why the Court will not grant Consent Orders.
Consent orders can be set aside where a court is satisfied there is a valid reason to set the orders aside. These reasons include impracticality, a hardship for the child of the relationship or default in carrying out the terms of the order.
A Consent Order is used to finalise your matter in respect of property settlement with your former spouse/partner and ensure that your ex-does do not come back in the future for another settlement.
Where a house is being transferred from the joint names of the parties to the sole name of a party you will usually receive a stamp duty exemption on that transfer when you have a Consent Order. A Consent Order can also formalise parenting agreements for children of the relationship.
The cost of your consent order will depend on the terms you are seeking and how complex they are. It is usually (though not always) less expensive to prepare Consent Orders than Financial Agreements.
A Financial Agreement is an Agreement signed by all parties to a marriage or de facto relationship which details the agreed division of assets in relation to a marriage or de facto relationship. Unlike Consent Orders, Financial Agreements are not filed with the Family Court.
Financial agreements are almost always prepared by lawyers due to their complex nature and the requirement that they strictly comply with the requirements of the Family Law Act 1975 (Cth). Financial Agreements are binding provided the Financial Agreement is drafted strictly by the legislation. A Financial Agreement is binding and enforceable under principles of contract law.
Each party to the Financial Agreement must obtain legal advice for the Agreement to be binding and enforceable on all parties. This is because the financial agreement is not filed in the Courts and as such, there is no judicial officer to determine whether the terms of the Agreement are fair, just and equitable.
However, financial agreements cannot deal with parenting matters such as with whom a child lives, spends time with and communicates with. Financial Agreements also cannot deal with child support.
Where a house is being transferred from the joint names of the parties to the sole name of a party you will receive a stamp duty exemption on that transfer when you have a Financial Agreement.
Financial agreements can be set aside by a Court if the Court finds there is a reason to set aside the Financial Agreement.
These include when the Agreement is obtained by fraud (including non-disclosure of a material matter), where there has not been strict compliance with the legislation in drafting and signing the Financial Agreement, where a party to the Agreement engaged in conduct that was unconscionable or where circumstances have arisen since the Agreement which makes it impracticable for the Agreement to be carried out.
The cost of your Financial Agreement will depend on the terms you are seeking and how complex they are. It is usually (though not always) more expensive to prepare a financial agreement due the complexity required.