Financial & Property Settlements

When married or de facto spouses separate they are ultimately required to divide their assets and liabilities to enable them to end their financial relationships and become financially independent.

A ‘family law property settlement’ refers to the process of formally dividing and allocating the various assets and liabilities to the spouses.

This may involve, for example, one person retaining a real property and making a payment to the other, or a real property being sold and the proceeds divided between the spouses, and the division of motor vehicles, superannuation and other investments.

Family Law property settlements can also deal with the issues of ongoing financial support paid between spouses.

A Court Order is the most common method of formalising a family law property settlement.

It is a legally binding written document that outlines the various things that need to be completed to enable the family law property settlement to physically occur.

For example, it will outline which spouse is to retain which asset and liability, and the timelines and conditions involved in the transfers occurring.

A Consent Order is a Court Order that is obtained with the consent (agreement) of both parties.

Where parties agree to the terms of their family law property settlement, then lawyers will draft into a formal written agreement.

This agreement is filed with the Court, and if the Judge deems the settlement to be fair and reasonable, they will approve and stamp the written agreement as a legally binding Court Order (called a ‘Consent Order’).

A Binding Financial Agreement is like a Consent Order.

However, rather than having the agreement approved by the Court as a legally binding Court Order, a Binding Financial Agreement does not involve the Court, but instead requires both parties to have lawyers who sign certificates confirming that they have provided certain advice.

The Binding Financial Agreement method also does not require the terms of the settlement to be fair and reasonable. A Binding Financial Agreement can also deal with certain other financial matters that Consent Orders cannot.

Binding Financial Agreements can also be completed before spouses separate, before they are married (colloquially known as pre-nuptial agreements) or even before they start living together in a de facto relationship.

These documents can deal with how assets and liabilities will be divided in the event that the parties separate.

The ‘Divorce’ is a separate process that is essentially a decree made by the Family Court that spouses are no longer married, and they are free to marry other people.

Spouses must have been separated (either physically or whilst living under the same roof) for a period of 12 months before they can apply for a divorce application.

However, unlike a Divorce Application, separated spouses are not required to have been separated for a period of 12 months before they apply to have property settlement Consent Orders approved, or they apply to the Family Court to commence property settlement proceedings. These two processes can occur at any time following the spouses’ separation.

Family law property settlement matters can also be finalised at any time following separation by way of a Binding Financial Agreement. Further, as detailed above, family law property settlement issues can also be dealt with by Binding Financial Agreements before parties separate, or even marry or even live together.