There is no legal requirement to settle financial and property matters at the end of a relationship in any particular way. You do not need to lodge a form with the court or obtain court approval to complete a private property settlement. That said, there are significant advantages in ensuring that any agreement that is reached privately is formalised in some way.
Consent orders are the most common way used to formalise a private property settlement. Alternatively, parties can enter a binding financial agreement (BFA) about all or part (i.e. just about the superannuation) of the property of the relationship. Financial agreements can also deal with maintenance and child support.
The main difference between consent orders and a BFA is that the former is approved by the court. In other words, the court must be satisfied that the orders sought are just and equitable. On the other hand, BFA’s are not lodged with the court and therefore do not need the court’s approval to be binding on the parties.
At Sapphire Legal, we can advise you on which option would be appropriate in your circumstances and help you negotiate terms with your ex- partner.
If you have already negotiated a property settlement and simply need help in formalising what has been agreed upon, we offer fixed fee rates for the preparation of private agreements.
The timeline for a property application is 12 months after a divorce order has taken effect or 2 years after the end of a de facto relationship or 12 months after a binding financial agreement is set aside. If you are outside the stipulated time limit, you will be unable to initiate proceedings without leave of the court or consent of the other party.
The average cost in Australia of a fully litigated property case starts at $50,000 per party. This is a sobering thought and, in an attempt to reduce the number of disputes in the court, as of 1 September 2021, an Applicant will be required to file a certificate stating that they have made a genuine attempt to settle prior to filing their initiating application (unless an exception exists).
The court uses a 4 staged process to help it determine a “just and equitable settlement”. These are:
Step 1: Identify and value the assets, liabilities and financial resources of the parties as at the date of hearing;
Step 2: Assess each parties financial, non-financial and welfare contributions to the asset pool;
Step 3: Assess the parties’ future needs and resources – factors such as their age and health and their ability to support themselves and other commitments i.e. having the care of children etc are taken into consideration to adjust the allocation reached based on contributions at step 2.
Step 4: Consider the results of steps 1 – 3 and decide what order, if any, should be made in the circumstances for a “just and equitable” outcome to be achieved.
All property owned by either spouse with each other or with any other person is consider for the property settlement. The court has the power to alter the parties’ interests in all their property, regardless of when or how it was acquired and in whose name it is owned.
Legal costs already paid may possibly be added back as notional assets to the property pool however unpaid legal costs will not. Section 117 of the Family Law Act decrees that each party is responsible for paying their own legal costs unless the court makes an order as to costs against the other party.
Unless you already have ready access to funds, you should attempt to negotiate an advance of funds with your ex-spouse. If your proposal is rejected, you should think carefully as to whether the expense of an application to the court for an order for interim costs is worth it. The legal costs you incur in trying to obtain such an order will only serve to reduce the size of the asset pool by the amount of your legal bill.
Even if you intend on representing yourself in your family law proceeding, seeking advice along the way can be extremely valuable.