Author: Carol Pages, Pages Family Law.

In the final article of this series on Family law property division we explain the two major ways of formalising your property division, and why you shouldn’t risk a handshake deal.

Why do we have to do this?

Formally documenting your family law property division is recommended, even if you are amicable, you have a written agreement from a mediator, or you don’t want to involve lawyers or the Courts.

The advantages of legally documenting your agreement include:

• – certainty for both parties about the division of assets;
• – a formal document to change the ownership of property including real estate, or a superannuation split;
• – enforceability if the agreement isn’t followed;
• – a ‘clean break’ which finalises the financial relationship between you at the date of the agreement and avoids, as far as possible, any future claims.  There have been several cases in the courts years after separation where the parties’ agreement has not been legally documented, and one party has received a lump sum of money, such as an inheritance, and the other party has successfully made a claim.

It is important to note that there are time limits to making an application to the Court for a property adjustment.  These are 12 months from the issue of a final divorce order if you were married, and two years after the date of the breakdown of a de facto relationship.  There are circumstances where leave to make an application outside of this time can be sought from the Court, however it is advisable where possible to make your application within the standard time frames.

How can we record our property division?

There are two legal ways to formalise your property division – a binding financial agreement and consent orders.  Both have their unique features, with some examples of these described below to help you to decide which legal agreement best suits your needs.

Consent Orders

Consent orders are made by the Federal Circuit and Family Court of Australia after completion of an application by the parties when they have reached their agreement.  Information about the process along with the form is available on the Court’s website by following this link:  Application for consent orders (do it yourself kit) | Federal Circuit and Family Court of Australia

The features of Consent Orders include:

• – You receive the seal of the Court on your orders – meaning that the Court has approved your property division as meeting the legal requirements of ‘just and equitable’.
• – You can include your parenting arrangements in your consent orders, and this gives you the peace of mind of your arrangements being enforceable.  Please note parenting plans issued by mediators are not enforceable – but these can be turned into Consent Orders.
• – You do not need to have a lawyer to prepare an Application for Consent Orders, and you can do this yourselves using the DIY kit and the link above.  You will also need to register to be able to file and receive your documents on the Commonwealth Courts portal, and there are guides on the Court’s website on how to do this.
• – Each party has obligations to disclose all of their assets and liabilities and if they have not done so, an application can be made to have the Consent Orders set aside for non disclosure. Legal advice should be obtained if this has happened to you.
• – Your Consent Orders once sealed by the Court can be given to your conveyancer for transfers of property, or your superannuation fund to process your superannuation split.

Binding Financial Agreement

The other way to record your property division is by a Binding Financial Agreement or BFA.  This is the same type of document that is used either before or during a marriage or de facto relationship to set out how property will be divided if the parties separated (ie a ‘pre nup’).  You do not need to have a BFA or pre-nup before or during your relationship to have one after separation.

The features of a BFA include:

• – You do not receive the Court’s seal or approval of your agreement being ‘just and equitable’.
• – No parenting matters are included.
• – It can include information about spousal maintenance, including to confirm none is payable, and in some cases a spousal maintenance only BFA can be made alongside Consent Orders.
• – Each party must receive independent legal advice from separate lawyers about the advantages and disadvantages of entering into the BFA, and the effect of the BFA on their rights.  For example, what would the division look like if it was decided under the law and met the just and equitable requirement? It may be that it would be the same.
• – Assets and liabilities are disclosed in a similar manner to Consent Orders, however different considerations apply as to when a BFA can be set aside which your lawyer will advise you about.
• – It can be given to your conveyancer for transfers of property, or your superannuation fund to process your superannuation split if the relevant provisions are included in the BFA.
• – A BFA cannot be entered into by anyone who receives an income tested benefit or allowance.  

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The content of this article is provided for information purposes only and does not constitute legal advice.  We recommend that you seek legal advice relevant to your own circumstances and we would be happy to assist you.

Carol Pages is the Principal of Pages Family Law and an Accredited Specialist in Family Law and a Nationally Accredited Mediator. If you would like advice about your own separation, please contact Pages Family Law at info@pagesfamilylaw.com.au or on 03 9121 8077.