Most middle-class separating couples get a Consent Order to formalise and protect their financial affairs going forwards. The reasons are compelling:
Consent Orders Help Unlock Your Life
Separated couples need finality, which means proper financial separation.
You might carry on for a few months after separation with your financial affairs still joined, but that can't last. Until you formalise who will keep what, your life can be locked in limbo.
Maybe your wealth is tied up in a house or super or investments. And maybe you even have a verbal agreement. But you quite rightly can't just release that wealth between you without total certainty that your "deal" is real.
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 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.
The Safest and Least Expensive Option
There are actually two ways to create a legally binding agreement: Consent Orders or Binding Financial Agreements ("BFAs").
Consent Orders are by far the most cost-effective way of getting your finances sorted without spending eye-watering sums on legal fees. And they're also much safer than BFAs.
Binding Financial Agreements cost more because:
Consent Orders Give You Certainty
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 and overturned by a court than Consent Orders. So although BFAs might be suitable for very unusual situations, in the overwhelming majority of cases Consent Orders are an infinitely better choice.
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.
Consent Orders will give you peace of mind and a solid foundation to get on with your life.
How We Can Help
If you want to formalise your deal as Consent Orders, we can help.
We're one of Australia's largest private mediation firms and we assist hundreds of couples to prepare Applications for Consent Orders.
Since everyone's situation has some unique elements, the starting point for Consent Orders is a chat so we can understand what you need to achieve.
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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Call: 1300 975 994
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