Consent Orders or Binding Financial Agreements (Separation Agreements)
When a marriage, de facto, or same sex relationship breaks down, two main issues need to be sorted out. Firstly there is the issue regarding any children of the relationship, and secondly, there is the property issue. We recommend that both of these issues be dealt with as soon as separation occurs, as only the application for a divorce itself requires the parties to wait 12 months from the date of separation, before making the application.
By signing consent orders, the parties can sort out once and for all, their rights to property accumulated before and during the marriage or relationship, and how any children are to be cared for.
To establish a fair distribution formula, consideration is given to:
- Values of jointly owned and separately owned assets, including any assets held in a trust or company name. This includes bank accounts, superannuation, real estate, shares etc.
- Any liabilities.
- Whether one party entered the relationship with more assets than the other.
- The financial and non-financial contributions made by each party during the relationship.
- Their respective earning capacities, state of health, and their current and future needs. (If a party has an injury which prevents them from working, that disadvantage will be considered)
- The state of health and the current and future needs of the children.
- If for example the husband has an injury which will prevent him from working in the future, then that disadvantage will go in the husband’s favour. Other disadvantages such as a lack of education, or working capacity, are also taken into account in favour of the disadvantaged party.
If the relationship has been a long term one, (20 years or more), the split starts at 50:50, and is then varied up or down according to each party’s needs, and the contributions made. Once the apportionment is established we prepare a Binding Financial Agreement which complies with all legal requirements. It becomes binding when it is signed by the parties and properly witnessed by a qualified witness, which is usually the respective party's solicitor.
With a strong, compliant agreement in place, both parties are bound by its terms, allowing them to move forward without the fear of one party coming back in the future claiming that their apportionment was insufficient and they wish to claim more.
Why is it important to consult with us?
- To be valid, a Binding Financial Agreement must be in writing. It must be precise, accurate and comply with the Family Law Act and relevant state legislation.
- Protection of assets may need to be taken out to prevent assets from being sold or transferred during the negotiation period, eg lodging a caveat over any real estate, or applying for a Court injunction. Asset protection is particularly recommended if the asset is owned solely by one party.
- Trying to sort matters out yourself may seem like a good idea at the time, but taking short cuts will simply put you at the risk of not receiving your full entitlement. It could also leave you under a cloud of uncertainty, with the other party possibly coming back at a later date to claim against you.
- Property issues must be sorted out within 12 months from the date when the divorce becomes absolute, otherwise you may lose your rights. In some instances an extension of time may be sought, however there must be very good grounds on which to base an application for an extension of time.