Separation requires the division of property between the parties.
Why? Because if you do not legally formalise your agreement, you run the risk that one party may change their mind. This can be expensive.
There are two options to settle property matters: a Financial Agreement or Consent Orders. Both documents are a formal agreement regarding the division of your property, but are drafted and enforced in different ways.
Financial Agreements
A Financial Agreement is a private agreement between parties, so it is not subject to the Court’s review. However, Financial Agreements can be more complex and expensive to prepare.
A Financial Agreement includes background information about the relationship, identification of the assets and itemisation of what each party shall retain.
This agreement does not need to satisfy the ‘Just and Equitable’ test, therefore there is risk that the agreement may benefit one party more than the other. As a result, there is a larger risk that the document may be challenged by a party later if they decide to no longer be bound by it.
As there is a risk the Financial Agreement may not be just and equitable for both parties, each must obtain independent legal advice regarding the document. A Solicitor must sign a certificate that they have given the required advice.
Consent Orders
Unlike Financial Agreements, Consent Orders are filed with the Family Court. Consent Orders require two documents, those being an application for consent orders and a minute of order.
Consent orders form a written agreement that identifies both parties, liabilities, superannuation entitlements and contributions that were made to the relationship. The proposed orders will outline the orders you wish the Court to make regarding the division of property between the parties.
The Court must be satisfied that the proposed orders are just and equitable to both parties before they are approved. Once the orders are approved by the Court they are binding on both parties and cannot be amended.
It is important to note that parties must file the application for consent orders within a year of their divorce. This period is 2 years for the separation of de facto couples.
Which approach do I choose?
Both options offer advantages and suffer disadvantages. We recommend that you take a moment to consider the current circumstances and your relationship with your former partner to evaluate the best option for you. It is important that you receive proper advice as to which option is most beneficial to you. It is important to get your strategy in place.
Please call us to make an appointment, Elena and the team look forward to helping you resolve your matter.