Binding Financial Agreement or Consent Orders?
If you’ve recently been through a divorce or de-facto separation, you will likely be in the process of organising your life post-breakup. It can be hard to know what to do when you first separate, however a big part of the separation process is exploring and arranging property settlement with your former partner.
Property settlement is the process in which you divide everything that you’ve accumulated in your time as a couple and is inclusive of all current assets, financial resources and liabilities, superannuation and pension allowances.
Once you’ve reached an agreement regarding property settlement, it’s best to get the agreement made formal. In Australia, there are two ways of reaching a formal agreement regarding property settlement – consent orders and binding financial agreements.
Consent Orders:
A consent order is a written agreement that outlines the decisions made regarding property settlement and/or parenting plans that both parties consent to.
The process for getting consent orders involves filling out an application and submitting it to the courts. If you would like to arrange orders for your property settlement and child custody, you may do so in the same application.
Once the court receives the application, a judge will review it to ensure that the proposed agreement is deemed to be just and fair. This means that the court has the power to reject an application if it doesn’t find the agreement to be fair or in the best interest of the child/ren.
In order to apply for consent orders, you do not have to use a lawyer however it is recommended that you use one as once the orders are approved, they become enforceable. There are very few grounds for which a consent order can be appealed, varied or discharged.
It’s important to note that you do not need to go to court in order to apply for consent orders, so if you’re looking to for property settlement without going to court, this could be the best option for you.
To learn more on consent orders, check out our blog post what is a consent order?
Financial Agreement:
A binding financial agreement is a legally binding agreement between two people that outlines the division of property and finances in the event of a breakdown in the relationship. You can enter into a binding financial agreement at any stage of a de-facto relationship or marriage.
The process for entering into a financially binding agreement involves both you and your former partner receiving independent legal advice from a practising lawyer who will need to adhere to a list of matters specified in the Family Law Act.
Once both you and your former partner have received your own independent legal advice, your lawyers will draw up the financially binding agreement, which both you and your former partner will sign. This will make the agreement legally binding.
Unlike a consent order, financial agreements don’t have to be fair to both parties, nor will they need to be approved by a court or any other independent bodies in order to be finalised/approved. There are also a few grounds for which financial agreements can be set aside which do not apply for consent orders.
It’s important to note that you can’t formalise parenting arrangements or custody issues with a financial agreement however a binding financial agreement could be the best option if you’re not looking for an even division of property but you have reached an amicable agreement with your ex-partner for your own reasons, or if you wish to prevent spousal support etc.
In order to make your financial agreement legally binding, you will need to hire an experienced family law expert such as Burbank & Brown.
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Need some help navigating your separation and everything that comes with it? Get in touch with Burbank & Brown.
