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How to Start Dividing Your Property

What happens if I don’t document my property settlement?

If you separate irrevocably, you have a choice as to what you do about property settlement. The Family Law Rules state that you must have reached an agreement about dividing your property within:

  1. Two (2) years of separation for de facto couples, or
  2. 12 months of divorce (if you are married).

If property settlement is not reached within the required time frame, then either party may file an application seeking leave from the Court to proceed out of time.

You have two (2) choices as to how you document your agreement:

  1. By filing Consent Orders with the Federal Circuit and Family Court of Australia (FCFCOA), or
  2. Signing a complying Binding Financial Agreement (in which each party to the Agreement has first received separate independent legal advice from his/her own Solicitor and provided a certificate to such effect annexed to the Agreement) certified by two (2) independent lawyers.

Documenting your Agreement

Consent Orders

The Application, Short Minutes of Order and supporting documents are reviewed by the Court and if approved, Orders are made by the Court. If the Court is not satisfied that the proposed Orders are just and equitable, the Court will reject the application or seek further information. Formal legal advice and certification is not mandatory, but it is very difficult to have orders made by the Court without formal legal advice.

an image of a wife and husband having a fight about dividing your property after separation
Binding Financial Agreement

In this option, an agreement is reached and documented though a financial agreement which is made binding when each party has formal legal advice from an independent lawyer and each lawyer issues a certificate in compliance with the Family Law Act 1975. There is no requirement for the binding financial agreement to be registered or approved by any Court.

Dividing Your Property

Options 1 and 2 above are legally necessary if you wish to split or transfer superannuation. Moreover, you need the above options if you wish to transfer matrimonial real estate to a spouse party or their children without incurring stamp duty on the transfer.

Option 3, an informal agreement, comes with some potentially significant risk for either or both parties. If either party makes an application to the Court seeking leave out of time, and they are successful, then a further adjustment to the property settlement can be sought and granted.

This type of application will be heard on its merits.

a full shot of a lonely young woman thinking about how to start dividing your property after separation from her de facto partner

Formal disclosure

If it has been many years since the informal financial settlement, you are likely to be required to provide detailed evidence, such as:

  1. A detailed list of your financial position at the time of separation; and documents to support your disclosure; and
  2. What your current financial position is now, including documents to support your disclosure; and
  3. What financial changes have occurred during the intervening period such as inheritances, gifts, sources and application of financial resources etc.

The longer the period of time has elapsed the more complex it will be to unravel the financial positions. This can be significantly exacerbated if the parties have re-partnered and some or all of the settlement funds have been disbursed pu

Considerations

Although you have informally agreed to a financial settlement, it does not mean that the settlement was fair and equitable. There may have been a lack of full financial disclosure by one party, or undue influence may have been used to bully a party into agreement. Equally importantly, one or both parties may not understand the full implication of the financial agreement they were making at the time.

An application seeking orders out of time will need to take all these things into consideration. The Court may not necessarily make orders adjusting the financial settlement, but the cost of going through the process from claim to the making of the orders will be stressful, time consuming and expensive in terms of legal fees.

Even if you reach an agreement on the adjustment of the financial settlement out-of-court through mediation, the emotional and legal financial cost will still be high. Hence, it is prudent and cost effective to formally document your financial settlement now so that there is no prospect of either party coming back in future years for a ‘second-bite-of-the-cherry’.

Need help with dividing your property?

AussieLegal offers a range of family law services, including the preparation of application for Consent Orders, and preparation of Binding Financial Agreement (BFA).  Both services include independent legal advice and certification for two (2) and is compliant with the Court requirements.

Call us on 1300 728 200 to discuss your situation with one of our consultants.

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