Documenting your property settlement
Separated parties who have reached agreement (whether in relation to property, parenting or both) can document or formalise that agreement in two ways:
Consent Orders; or
A Financial Agreement.
An informal agreement that has not been documented by way of consent orders or a Financial Agreement is not legally binding. Even if you have agreed not to divide any assets; that is, each to keep your own, it is important to document the settlement to avoid a future claim. Depending on the individual circumstances of your case, we may recommend that one way of formalising your settlement is preferred over the other.
Consent Orders
Consent Orders are a written agreement approved by the Federal Circuit and Family Court of Australia (“the FCFCOA”). You can apply for Consent Orders to be made by the FCFCOA, administratively with no attendance required. The Court will not make Consent Orders unless, it is satisfied that property orders are just and equitable and parenting orders are in the best interests of the child or children.
To obtain Consent Orders, you must file two documents with the Court. The first document is an Application for Consent Orders. This form must be completed by both parties, and sets out their respective incomes, assets, liabilities and financial resources and provides information about each parties’ contributions and future needs. It is the basis upon which the Court can be satisfied that the Orders are just and equitable.
Here is a link to the “Application for Consent Orders (do it yourself kit)”, which is a great place to start:
In addition to the Application for Consent Orders, a Minute of Consent Orders is also filed with the Court. The Minute records the agreement that has been reached; it is the terms of settlement. Once approved by the Court, Consent Orders will made in those terms.
Independent legal advice for both parties is recommended but it is not a pre-requisite to the Family Court making Consent Orders.
Financial Agreements
A Financial Agreement is a private agreement that can be entered into before a marriage or de facto relationship begins or during or after a marriage or de facto relationship has ended. A Financial Agreement allows parties to contract out of the Family Law Act with respect to their property settlement and any claim for spousal maintenance.
The Federal Circuit and Family Court of Australia does not need to approve or ratify a Financial Agreement. There are very strict requirements for a Financial Agreement to be binding. In short summary, these include but are not limited to:
The Agreement must be signed by both parties;
Before signing the agreement, each party must receive independent legal advice about the nature and effect of the agreement and the advantages and disadvantages to that party of entering into the agreement at that time. The lawyer must provide a statement (attached to the agreement) that the advice has been provided.
Financial Agreements are intended to be binding and enforceable and to forever deal with both parties claims for a property settlement and/or spousal maintenance.
Financial Agreements should be carefully prepared, and each party (with their respective lawyers) must ensure that the agreement, the advice and the way in which each party signs the agreement, strictly complies with the requirements of the Family Law Act.
Full and Frank disclosure
Neither Consent Orders nor a Financial Agreement can be made unless both parties have complied with their obligation to make full and frank disclosure. This means providing to the other party current information about income, assets, liabilities and financial resources (including for example, any interest in a trust or inheritance). This obligation is compulsory and non-negotiable.
There are limited grounds upon which Consent Orders or a Financial Agreement can be set aside, one of which is material non-disclosure. In order for your settlement to be binding and enforceable, it is imperative that the obligation for full and frank disclosure have been met.
