Here we will discuss the divorce property settlement process under the Australian Family Law. Consent orders or a binding financial agreement? What should you choose? How does the Federal Circuit and Family Court of Australia determine financial settlement between ex-partners?

Divorce is a difficult and challenging time for anyone, especially when it comes to matters of property and finances. Often, couples will struggle to come to an agreement on how to divide up their assets and determine who gets what.

Depending on the circumstances of the divorce, couples may be able to enter into a binding financial agreement that outlines the division of property in detail. Alternatively, couples may go through a divorce property settlement process in order to determine how their assets will be divided. This often involves difficult negotiations between former partners. It also may require input from family law solicitors who can help guide both parties towards an equitable outcome.

Regardless of the path they choose, most couples find it helpful to consult with a family lawyer or mediator throughout the divorce property settlement process. This ensures that their rights are protected throughout the process. Ultimately, although dealing with the aftermath of a divorce or separation can be challenging, it’s important for everyone involved to remain focused on moving forward in a positive way and rebuilding their lives after this major transition.

DIVORCE PROPERTY SETTLEMENT UNDER THE AUSTRALIAN FAMILY LAW

In Australia, divorce settlements follow a predetermined set of rules and guidelines. For example, under the Family Law Act 1975, the Family Court of Australia has the power to make orders concerning maintenance, property settlement, parenting, and access arrangements for children following a breakup. Furthermore, Australian courts also typically favor independent legal advice when it comes to negotiating and drafting the terms of a property settlement. This is because these documents can have far-reaching impacts on many aspects of both parties’ lives going forward.

If you cannot agree on how to divide the property you own and pay the debts you’ve incurred, your financial dispute will be decided by the Federal Circuit and Family Court of Australia or a Local Court. Which court to apply to will depend on the value of the assets, and the complexity of the matter. This equally relates to married and de facto couples.

CONSENT ORDERS OR BINDING FINANCIAL AGREEMENT?

There are two main options for settling your property division and financial arrangements after divorce: Consent Orders or Binding Financial Agreement. Both have their advantages and disadvantages, so it’s important to consider your options carefully before making a decision.

So, which one is better for you? It depends on your individual circumstances.

THE MEANING OF CONSENT ORDERS

Consent Orders are made by the Federal Circuit and Family Court. They cover property division, but not spousal maintenance and child support. They are legally binding and can be enforced by the court if necessary. A big advantage of Consent Orders is that they can be tailor-made to suit your individual circumstances.

This can be a good option if you’re not sure that your ex-partner will stick to the terms of the agreement.

In many cases, parties are able to reach a property settlement agreement. If they do, they can make an Application for Consent Orders which is relatively straightforward. As a result, Consent Orders often cost less to prepare than a BFA. They can be finalised more quickly. Thus, if you want a quick and inexpensive settlement, this could be your option of choice.

WHAT IS A BINDING FINANCIAL AGREEMENT?

A Binding Financial Agreement (BFA) is a contract between you and your ex-partner. It outlines how you will divide your property and finances. BFAs are legally binding. This can be a good option if you’re confident that you can come to an agreement between yourselves, and you want to save time and money by avoiding the court process.

Agreements are significantly more sophisticated and do not have a requirement to provide for a fair and equitable outcome. In contrast, the court will always make sure consent orders are just and equitable. In other words, ex-partners have much more control over the terms of the settlement and the final outcome. BFAs offer more flexibility than Consent Orders. You can tailor them to suit your specific needs. They can be less straightforward to enforce than Consent Orders. As a result, Binding Financial agreements can be more expensive and time-consuming.

It’s important to get legal advice before entering into a Binding Financial Agreement, as there can be serious consequences if you don’t do it correctly. Moreover, it is mandatory for both parties to get independent legal advice. If you don’t, the court will set aside the agreement if one of the parties raises the issue of the BFA validity in the future.

There are pros and cons for either option, and it is best to get legal advice as to which option would work best in your particular circumstances.

WHAT IF YOU CAN’T AGREE?

Then you will need to file an Application for Property Settlement Orders in the appropriate Court (the Federal Circuit and Family Court, or a Local Court).

Even after filing an application for property settlement, you will have an ongoing opportunity to settle the matter amicably. In fact, parties settle 95% of property applications filed in the Family Court without ever getting to trial. With the remaining 5% where they can’t achieve a settlement, the Court will make a decision dividing the property of the couple following a hearing.

DIVORCE IN AUSTRALIA WHO GETS WHAT

The court does it by way of a “4-step” process.

Step1.

It identifies your net asset pool. What does this mean? The judge will determine your assets and deduct liabilities coming to the net figure of assets in a divorce.

Net Asset Pool = All Assets – All Liabilities.

Step 2.

The court then looks at how each party contributed to the relationship. Contributions can be of financial and non-financial character. Non-financial contributions include parental or homemaker contributions.

Step 3.

The third step includes identifying the needs of the parties. At this point, the court will take into consideration factors such as:

• Age and state of health.
• Capacity to gain employment.
• Whether or not the parties have care for underage children.
• Income, property, and financial resources.
• Various other factors affect the future needs of the parties.

Step 4.

The court will then decide on the splitting percentage of the net asset pool and determine what assets each person gets. Finally, it looks at the overall result and determines whether it is just and equitable to the parties in the circumstances.

HOW CAN WE HELP YOU?

The divorce property settlement process under Australian Family Law may be less than straightforward. We specialise in the area of family law. Our experts provide tailored services suitable for your particular circumstances of the division of assets in divorce:

• We advise as to your rights and obligations.
• Our top family lawyers will assist you in negotiating a resolution of issues in dispute.
• We will help you formalise the agreement and make it legally binding and enforceable.
• Lastly, we will represent you in court proceedings striving to achieve the best possible outcome for you.

Where appropriate we will work with accountants, financial and tax advisers to maximise the best possible outcome in your case.

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