After the breakdown of your relationship, the distribution of your assets and property can be a complicated and emotional process.
- If you agree on a division, you can seek to formalise your agreement by applying for consent orders; or
- If you agree on a division, you can seek to formalise your agreement by entering into a Binding Financial Agreement; or
- If you cannot agree on a division, you can apply to a court for financial orders – including spousal maintenance.
- Consent orders are legally enforceable agreements made between separated or divorced couples that have been formalised by the Family or Federal Circuit Court.
- Consent orders are written documents outlining your agreement which are then sent to the court for a registrar to make the orders binding.
- Consent orders are required to be a fair division of assets based on the history of the relationship and the future needs of both parties.
- Consent orders do not require both parties to have a lawyer as a Registrar will ensure that the orders made are fair and equitable.
- Consent orders are often the easiest and least complicated way to divide your assets.
- You can agree to orders that no party has any claim in the future to either party’s property.
- Consent orders may provide stamp duty and Capital Gains Tax relief for separated couples, subject to some exceptions.
- BFA’s are legally enforceable agreements made between separated, divorced, soon to be married or already married couples commonly referred to as a ‘prenuptial agreement’.
- BFA’s state how your assets, financial resources and liabilities will be divided.
- By entering into a BFA parties lose (contract out of) the right to ask the courts to decide the division of their property after they separate.
- Because you do not use the courts to make the agreement binding, they do not have to be a fair division.
- Before a BFA can be finalised, both parties are required to receive independent legal advice.
- You can agree that no party has any claim in the future to either party’s property.
- A BFA may provide stamp duty and Capital Gains Tax relief for separated couples, subject to some exceptions.
It is essential that before resulting to court litigation, that you attempt to reach an agreement through meaningful negotiations. Unfortunately however, not all negotiations are successful and there is often a need to file an application to the court for the enforcement of a financial order.
The court will consider a number of factors to determine the fair and equitable division of assets such as:
- The net value of property owned by both parties. This can include real and personal property, such as real estate, shares, companies, vehicles, superannuation etc;
- The contributions of each party as set out by law, which can include both financial and non-financial contributions; and
- The future needs of the parties, to ensure that one party does not suffer detriment after the relationship breakdown.
- Superannuation splitting law treats superannuation as a different type of property. It lets separating couples value their superannuation and split superannuation payments, although this is not mandatory.
- Splitting your superannuation does not convert it into cash – it is still subject to superannuation laws contained in the Family Law (Superannuation) Regulations 2001 (for example it is usually retained until retirement age).
- When entering an agreement, it is common for parties to split a percentage of their superannuation and the amount ‘rolled’ over into the other’s superannuation fund.
- Superannuation is commonly included as an asset when identifying the assets in the property pool.
- If you were married, applications for property adjustment must be made within 12 months of your divorce becoming final.
- If you were in a de facto relationship, your applications for property settlement must be made within two years of the breakdown of your relationship.
- If you do not apply within these time limits, you will need special permission of a court. This is not always granted.
- Binding Financial Agreements typically do not have a time limit.
The division of property is a complex and often difficult and lengthy process. At Stone Group Lawyers we can advise you in explaining your rights and responsibilities and help you achieve the best outcome for your situation.
For more information in relation to financial orders and property settlements, contact one of our family lawyers for a free 45 minute consultation on 1300 088 440.