Property Settlements - Finalising Financial Agreements

A Property Settlement is the way in which separated couples resolve their financial matters following a relationship breakdown.

There are a few ways in which financial matters can be resolved and some options may be more appropriate than others.

The common ways financial matters can be resolved are:

1. Informal arrangements; or
2. Financial Agreements; or
3. Consent Orders; or
4. Litigation. 

Which of the above options is more appropriate than the others will depend on your individual circumstances. Independent legal advice is required to determine which option would best suit your circumstances to resolve your individual financial matters.

Informal Arrangements

An informal arrangement to settle financial matters is just an agreement  between the parties that is not legally binding by way of Orders or a formal Financial Agreement recognised by the Family Law Courts.

It is important to note that finalising your property settlement matters in this way does not formally resolve your property settlement matters in a way that is legally binding and a party could later look to unwind the agreement that has been reached.

Obtaining independent legal advice in relation to your personal circumstances to see whether this approach would be suitable for you is crucial. There may be a number of concessions or benefits that will not be available if the arrangement is  not a legally binding arrangement.

Financial Agreements

A Financial Agreement is one of two ways in which a property settlement can be formalised and will be legally binding.

Financial Agreements are commonly referred to as pre-nuptial agreements but can also be used to deal with property at the end of a relationship.

Financial Agreements can be entered into at any time before, during or after a relationship, including de-facto relationships.

As a Financial Agreement will be legally binding on both parties, there is a legal requirement that both parties to the agreement obtain independent legal advice and a solicitor certify that legal advice was given before entering into the agreement.

If you are considering entering into a Financial Agreement, it is important to obtain detailed advice about the advantages and disadvantages to your legal rights before formalising your property settlement matters in this way. A failure to obtain independent legal advice may result in the agreement you have reached not being legally binding.

Consent Orders

Consent Orders are orders obtained from the Court, that formalise a property settlement with the consent of the parties and the approval of the Court.

Consent Orders should clearly state what the parties will need to do to give effect to the property settlement agreement that has been reached.

Consent Orders are not prepared by the Court, but rather are reviewed and approved by the Court. It is therefore important to obtain legal advice before submitting a Consent Order to the Court for approval.

Once a Consent Order is made, it is a final Order of the Court and cannot be further reviewed by the Court unless extreme circumstances exist.

Litigation

Litigation involves the Court stepping in and making a decision about how the financial matters of a property settlement will be resolved.

The Court’s obligation is to end financial relationships on a basis that is just and equitable. The Court does not have to consider what either party wants out of the property settlement. For example where both parties want to keep the matrimonial home, the Court has the power to order the sale of the property and split the proceeds of sale in a way so there is a just and equitable distribution as part of the property settlement.

Court litigation is often lengthy and costly and should be considered as a ‘last resort’.

It is often more beneficial to reach a negotiated outcome and obtain Consent Orders for your property settlement matter rather than having to go through the time, expense and emotional impact of Court litigation.

Which Option?

Your personal circumstances will determine which of the above options might be best suited to your situation. It is recommended that you obtain independent legal and financial advice about your circumstances to help determine which of options might be best suited to resolve your property settlement matters.

Our Family Law team and wilson/ryan/grose Lawyers can assist you with legal advice to assess your options and help you make informed decisions. Contact our office today to arrange a case assessment.