Most middle-class separating couples get a Consent Order to formalise and protect their financial affairs going forwards. The reasons are compelling:
Your Partner Can't Change Their Mind Later
Until an agreement is properly documented under The Family Law Act, it’s simply not binding. So years later your spouse can change their mind - maybe encouraged to do so by a new partner that neither of you have yet met.
Just signing a contract, even one witnessed by a JP, is not legally effective. There is a cut-off for claims 12 months from the date of divorce, but your spouse can still apply to have the court waive the rule if you win the lotto or build a business in the future. And courts have the authority to do just that.
So, like insurance, if you don’t buy, you can’t complain later.
Consent Orders are the most cost-effective way of getting your finances sorted without spending eye-watering sums on legal fees.
There are actually two ways to create a legally binding agreement: a Consent Orders or a Binding Financial Agreement ("BFA").
But Consent Orders are the lower cost option and also the safer option.
A Binding Financial Agreement costs more because:
A Consent Order is a decision by the Family Court that your proposed deal shall be the deal. You’ll in effect be ordered by the Court to go ahead with your deal. And your orders will record the fact that you have no further claims on each other.
Binding Financial Agreements, by contrast, are subject to challenge later if they’re not “fair dinkum”. Because a BFA is not scrutinised by Courts when created, it’s practically less secure than any Consent Orders. It’s much more common for a BFA to be challenged than any Consent Orders.
So while some BFAs work, some don’t.
Stamp duty and capital gains tax exemptions can be applied for and evidenced more easily when you enter Consent Orders and, say, one of you keeps the family house.
Consent Orders allow for superannuation splitting.
The federal courts enforce Consent Orders. If your spouse stops complying with a Consent Order, you can ask the court for sanctions and other remedies to compel your spouse to behave.
By contrast, a BFA is just another private contract. So if you're worried about whether your spouse will do what's agreed, Consent Orders are a far better option.
So, getting a Consent Order is a bit like buying insurance – protecting yourself for the future.
Very few middle-class Australians don’t get a Consent Order when they separate.
You can obtain a Consent Order any time after separation. You don’t have to wait until you’re divorced. Most couples do parenting and financial matters first and get a legal divorce later.
If you need help finalising your deal so it’s suitable for Consent Orders, we can help arrange that.
Divorce Partners provides a highly efficient divorce settlement service.
We help couples settle their divorce rapidly and amicably, creating solutions that are both pragmatic and fair.
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