When ex-partners reach an agreement for the settlement of their financial matters upon separation, there are two ways this agreement can be legally finalised. These are ‘consent orders’ and a ‘financial agreement’. It is important to finalise family law financial matters through one of these methods, as informal agreements can easily collapse. In this blog, we review the two most common ways of finalising family law financial agreements, and explore considerations you should take into account when deciding which avenue is most appropriate for you.
A consent order is a written agreement that is approved by a court. It can cover many family law matters, such as parenting arrangements for children as well as financial arrangements for property or maintenance. Consent orders are lodged with the Family Court and officially stamped as a court order. The court must be satisfied that the consent orders are just and equitable and/or in the best interests of the child/children (if applicable).
In order to obtain a stamped consent order, two documents must be filed — the application for consent orders, and the proposed orders. The application will contain important details of the parties, such as assets, liabilities, income and superannuation. The proposed orders should set out the orders that the parties have agreed on and are asking the court to make.
A financial agreement is not lodged with a court and is rather a private contract agreed on between the parties. In order to ensure the agreement is legally binding and enforceable, both parties are required to receive independent legal advice from different legal professionals about the consequences of signing the agreement.
Considerations when deciding which agreement is best for you
When deciding which avenue is more appropriate for your circumstances, there are a variety of considerations to take into account. Some of these include:
- Consent orders can cover matters pertaining to spousal maintenance, however a financial agreement may be a safer option to guard against any applications to prolong or increase maintenance. It is important to keep in mind that you are not confined to either option to settle your financial arrangements and a hybrid model could allow you to finalise your settlement.
- A financial agreement is not subject to judicial scrutiny and is a private agreement. Thus, any deal can be struck no matter how unfair it may be perceived. However, for a court to approve consent orders, it must agree that the orders are just and equitable.
- Often consent orders can take a long period of time to be approved, however financial agreements come into effect immediately upon the signing of the agreement by each party.
- If you are seeking property orders, you should read and consider the section 75 factors outlined in the Family Law Act 1975. To learn more about section 75 factors, see our blog here. Some of these factors include:
- How the length of the marriage affected the earning capacity of the party seeking maintenance The age of any children of the marriage/relationship
- The age and state of health of each of the parties
- The income, property, finances and ability to earn an income of each party
Get Legal Advice
An experienced family law professional will be able to assist you with determining which family law settlement document is most appropriate for you and your circumstances. If you would like further information, please do not hesitate to contact one of our experienced solicitors on 9963 9800 or via our contact form. For more articles on family and other areas of law, see our blog here.