Separation & Divorce – Approaches to Financial Settlement

Key points

  • There are a number of ways to approach financial settlements after a separation or divorce
  • The approach you take will depend on whether you can agree on the arrangements with your ex-partner or not
  • If you can agree you can apply for consent orders or you can make a financial agreement
  • If you can’t agree you can try mediation or dispute resolution
  • If you cannot agree after mediation and dispute resolution you can apply to the court
  • There are time limits for applying to the court for financial settlements
  • Financial settlements and family law are complex and you should consider getting legal advice on these issues

Background

When people separate there is often a need to divide up the things they owned and make financial arrangements. Even the Family Court state on their website that it’s generally best if you can reach your own agreement with your ex-partner because it will save money, time and stress.

How you make a financial settlement will depend on whether you can agree the arrangements with your ex-partner.

If you can agree on arrangements you can formlise what you have agreed by applying for consent orders or making a financial agreement.

If you can’t agree you can use mediation or dispute resolution to try and resolve the disagreement. If you still cannot agree you can apply to the court for financial orders.

Consent Orders

If you and your ex-partner agree on the arrangements you can ask the court to formalise them as court orders. You can do this without actually going to court.

The Application for Consent Orders requires each party to fully disclose their financial circumstances and sign to say what they have disclosed is true and correct.

Consent Orders are orders of the court and are legally binding. They can only be changed in limited circumstances.

You should consider getting legal advice before entering into consent orders.

You can download an Application for Consent Orders and templates for the orders themselves from the Family Court website.

You can lodge your application for consent orders electronically or physically at a court registry.

More information about Consent Orders is available from the Family Court website

Financial Agreements 

A Financial Agreement is a contract between parties made under the relevant section of the Family Law Act 1975.

You cannot enter into a Financial Agreement without obtaining legal advice.

You can enter into a Financial Agreement before, during or after marriage or a de-facto relationship.

If the Financial Agreement is valid and binding it limits the courts ability to determine proceedings between the parties.

A Financial Agreement can be broad and cover all aspects of the financial relationship between the parties or it can be narrow and cover only some issues.

The Family Law Act 1975 sets out the requirements for a Financial Agreement to be binding.

More information about Financial Agreements is available on the Family Court website.

Applying to the court for financial orders

If you cannot agree the arrangements with your ex-partner you can apply to the court for financial orders to be made.

Generally speaking there are a number of pre-action procedures required before you can apply to the court.

The pre-action procedures include:

  • Participating in a dispute resolution process
  • If the dispute resolution process is unsuccessful writing to the other party setting out your claim and exploring options for settlement
  • Complying with the duty of disclosure

There are some exemptions to having to comply with the compulsory pre-action procedures.

More information about how to apply to the court for financial orders is available on the Family Court website.

 

 

This summary has been prepared by MoneyBrilliant Pty Ltd (AFSL 492711). The information in this summary is of a factual nature only and does not constitute legal advice. You should seek legal advice from a legal practitioner before relying on this information. We are not suggesting or recommending that you take any particular course of action in relation to any financial product or service. It does not take into account your personal circumstances or objectives. If you need financial advice or taxation advice you should seek advice from a licensed financial adviser or tax agent. You may also be able to access additional information from the websites of the Australian Securities and Investment Commission (ASIC) or the Australian Taxation Office.

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