The end of a relationship can be a stressful and confusing time. Most people want to stay out of the Court system and try to reach an agreement between themselves.
There are obviously many advantages of making your own decisions about how your property is divided between you and your former partner. Not only does this save you the legal costs and stress of court proceedings, but it also allows you both to move forward with your lives sooner as you are not waiting for the Court process. It also gives you certainty about the outcome rather than having a Court decide this for you.
A lot of time and effort is generally involved in building up your assets over the course of a relationship. So, making the effort, even when it is difficult, to invest in reaching an agreement makes sense.
It is important that any agreement reached is properly documented so that it is binding and has the effect that you intended.
A Consent Order from the Federal Circuit and Family Court of Australia has the same effect as if a Court decided your property matter, however the benefit is that it is the settlement that you and your former partner both agree to.
Before the Order is granted, the Court must be satisfied that the agreement reached is “just and equitable”. This means that the court will firstly consider what constitutes the property of the relationship. This can include real estate, businesses, boats, bank accounts, superannuation and any other property. The parties provide information to the Court about the various contributions over the course of the relationship. These are not limited only to financial contributions or income earning, it can include non-financial contributions such as renovations and homemaking, as well as decision-making and parenting roles throughout the relationship.
The court will also consider the future needs of each party such as their respective incomes and earning capacity, any health issues and the ongoing care arrangements for the children.
Based on all of this information, the Court must be satisfied that the proposed settlement is “just and equitable” in all the circumstances having regard to the type of property that is being divided and the agreement that you have come up with.
It is important to remember that a handshake agreement or writing something out yourselves is not legally binding. This means you haven’t achieved a legally recognised settlement and have left the door open for a property settlement down the track.
It can be a nasty shock to receive a property settlement application when you have moved on with your life and thought that the ‘around the kitchen table’ agreement with your former partner was final.
Applications for property settlement must be commenced in a Court within 2 years of the date of separation for de facto couples and within 12 months from the date of a Divorce for couples who have been married.
Paula Phelan is a Family Lawyer with Specialist Accreditation in this area from the Queensland Law Society. She has been a lawyer for over 27 years and is the director of Phelan Family Law, a Rockhampton legal firm specialising in Family Law.
Website: phelanfamilylaw.com.au
