By Georgia Pitsadiotis and Rebecca Zanol, Directors of Alta Legal
Reaching an agreement is only the first step
When a relationship comes to an end, many separating couples can amicably reach an agreement about how their property and finances will be divided. If you have managed to do so without lengthy negotiations or litigation, that is an achievement in and of itself.
However, a common misconception is that once the house has been sold, bank accounts have been divided and assets distributed, the property settlement is complete. In reality, unless your agreement has been properly formalised, your financial relationship may not be legally at an end.
Why formalising your agreement matters
Entering into Consent Orders is one of the most effective ways of formalising an agreement privately reached between former partners. Once approved by the Court, Consent Orders become legally binding. They can provide certainty and finality without the need for contested court proceedings or for the parties to ever actually attend a Court hearing.
The Family Law Act 1975 provides that, as far as practicable, the Court must make orders that finally determine the financial relationship between the parties and avoid further proceedings between them. In practical terms, properly drafted final orders should seek to deal comprehensively with the parties’ financial affairs and provide a clear framework for their financial independence following separation.
Simply reaching an agreement between yourselves, even if recorded in a well-intentioned, self-prepared document, does not necessarily provide the same level of finality or legal protection.
Is your agreement fair?
The Court must also be satisfied that it is just and equitable to make the proposed financial orders. Obtaining independent legal advice can provide peace of mind that the agreement you have reached is within the range of outcomes that may be considered just and equitable in your particular set of circumstances.
Importantly, Consent Orders offer protection for both parties. Financial circumstances can change significantly after separation. Assets may be acquired, inheritances may be received, businesses may grow, and new financial commitments may arise. Life rarely stands still after separation. Properly drafted Consent Orders can provide confidence that the agreement reached at the time of separation will not simply be revisited years later.
Subject to limited exceptions, formalising your property settlement can significantly reduce the risk of either party later seeking a further property adjustment. Without a properly formalised settlement, assets held at the time of the original agreement, as well as assets acquired afterwards, may potentially become relevant to a future claim.
Protecting your financial future
Even where separation has been entirely amicable, peace of mind and financial security are valuable. Many former couples continue to enjoy respectful relationships, particularly where they share children or grandchildren. Formalising an agreement is not about mistrust. Rather, it is about ensuring that both parties have certainty and legal protection as they move into the next chapter of their lives.
It is also important to remember that strict time limits apply to property settlement applications following divorce or the breakdown of a de facto relationship. Obtaining legal advice early can help you avoid making an otherwise straightforward resolution more complicated than necessary.
If you have already reached an agreement with your former partner, or are in the process of dividing your assets, obtaining legal advice before implementing the agreement can help ensure that it is properly documented and legally effective. Early advice allows each step of the process to be explained clearly, potential issues to be identified, and the agreement to be finalised in a way that provides lasting certainty for both parties.
While separation is never easy, taking the extra step to formalise your property settlement can provide confidence that your financial arrangements are properly documented and that both parties can move forward independently.
Not every separation can be resolved amicably. Where an agreement cannot be reached, or where there are concerns about the proposed division of property, negotiation, mediation or court proceedings may be necessary.
Obtaining legal advice early can help you understand your rights, assess your options and determine the most appropriate pathway to resolving your property matter.
About the authors
Georgia Pitsadiotis and Rebecca Zanol are Directors of Alta Legal, a family law firm based in Torrensville, Adelaide.
Alta Legal offers an initial 30-minute obligation-free consultation with an experienced family lawyer. To make an appointment, call (08) 7079 8222 or visit www.altalegal.com.au
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