Most family law clients we see have recently separated from their spouse or partner and are understandably apprehensive about how to distribute the assets of their relationship.
If you are in this situation, the good news is that you do not necessarily need to go to court. The bad news is these matters cannot (or should not!) be resolved by simply agreeing on something with your former partner. This is what we would refer to as an informal property settlement and it is not legally enforceable. The risk which you take in doing this is that it doesn’t provide you with any protection if circumstances later change. At that stage, both parties would be able to demand a property settlement be entered into or issue court proceedings. This could result in you receiving less or becoming responsible for your former partner’s debts.
If you wish to enter into a valid and legally enforceable property settlement, there are only two ways in which this can be done. The first is a Financial Agreement and the second is ‘Consent Orders’. This article focuses on Consent Orders.
What are Consent Orders?
An application for Consent Orders is exactly how it sounds. It is an application to the court made by two parties who were married or living together in a de facto relationship which has broken down, requesting the court makes orders by consent. The purpose of these orders is to distribute all assets of the relationship and settle financial matters between the parties. A unique aspect of Consent Orders is that the parties do not strictly need independent legal advice in order to enter into them. The court will however, only make orders which they assess as being legally appropriate and relatively ‘fair’.
How do I go about entering into Consent Orders?
If you have decided that Consent Orders are right for you, we recommend undertaking the following process:
Step 1 – Initial Appointment with a Lawyer
Before you start having serious discussions about a property settlement with your former partner, we strongly recommend that you have an initial appointment with a Lawyer. At this appointment, the Lawyer can give you a detailed explanation of the process involved and answer any questions you may have, but most importantly, they can give you an assessment of what you are entitled to. It can be critical to have this information when you begin negotiating your property matters with your former partner. We offer a free, no obligation initial appointment with any of our family Lawyers.
At this stage, it is important to note that your Lawyer is likely going to ask for some information about your assets and liabilities. You may find therefore, that it is best for you to attend to step 2 first if you are on good terms with your former partner, so that you have as much of this information as possible when you see your Lawyer.
Step 2 – Disclosure
Once you have some idea of what you are entitled to, we recommend that you try to discuss your property matters amicably with your former partner. The important first step in these discussions is for you to exchange full financial disclosure. This usually involves exchanging details about all of your assets, including information about all of your properties and businesses, bank accounts, superannuation statements and similar financial documentation. It is not possible for you to know if the agreement you have reached is fair unless you know all of the assets which exist between the parties.
It is also important to note that full financial disclosure must be exchanged at some point throughout the process in any event. Once you have reached an agreement, a Lawyer needs all of this information to be able to prepare the application to send to the court.
Step 3 – Negotiation
At this stage, you should have an understanding of all of the assets and liabilities which exist between the parties, as well as some idea of what you are entitled to. You are therefore in a position in which you can begin negotiating with your former partner. Ideally you can discuss the matters directly, but we would also highly recommend attending mediation. Mediation should be conducted by a registered Family Dispute Resolution Practitioner and can range in cost from $30 to $3,000 per session. Services such as EACH, Relationships Victoria and Better Places offer low cost mediation across Victoria. The goal of these negotiations is for you to reach an agreement which you are happy with and that falls within the range of what your Lawyer advised you was fair.
Step 4 – Drafting the Application
If you are able to reach an agreement with your former partner, you can then return to the Lawyer you had your initial appointment with, so that they can prepare an application for Consent Orders on your behalf in order to formalise your agreement. Of course, if you are unable to reach an agreement, your Lawyer can also help you to try to negotiate an outcome. The more that you can do yourself however, the easier it will be for your Lawyers to try to reduce your legal costs.
There are two documents which a Lawyer needs to prepare in order to make an application for Consent Orders. To complete these documents, your Lawyer will require certain information about your relationship, a full list of all assets and liabilities which each party has disclosed, as well as an understanding of the agreement you have reached.
Once your application has been prepared, your Lawyer will send you a draft. It is critical at this stage that you read the documents carefully and confirm that all information is true and correct. If there is anything which you don’t understand, you should seek clarification from your Lawyer. Your Lawyer may also require some additional information from you before they can finalise the agreement.
Step 5 – Review and Negotiation
Once you and your Lawyer have settled on your documents, your Lawyer can send the final application to your former partner.
At this stage, your former partner does not need to engage their own Lawyer to review the application. It is critical however, that they are not placed under any duress or coercion when considering the documents, as this could invalidate the orders. For this reason, it is our firm’s practice to remind your former partner that they have the right to seek independent legal advice if they wish to.
Of course, the hope is that you have already agreed on the terms of your application and that your former partner will therefore only need to sign the documents. There is however, always a possibility that some terms of the agreement will need to be re-negotiated. This may be because the legal advice which your former partner has received suggests that your agreement should be changed. More commonly however, there are likely to be some orders which they are not comfortable with or need to be amended before signing.
Step 6 – Signing and Exchange
After you have negotiated the finer terms of the application, you should have two final documents for signing. At this stage, it is common that the final version of the documents will be sent to your former partner for signing.
Once your former partner has signed the documents, you can then sign the documents yourself or make an appointment to sign with your Lawyer. We recommend making an appointment to sign with your Lawyer in case you have any final questions and to ensure that everything is signed correctly. Your Lawyer is also required to sign a certificate confirming they have provided you with legal advice.
Step 7 – Lodgement and Assessment
Once both parties have signed the two documents, your Lawyers can lodge them with the court for assessment. There is a court filing fee of $170.00. Once the application is lodged, the court will then consider your application. This process can take anywhere between one week and two to three months depending upon the workload of the court at that time. If the court is satisfied with your agreement, they will then make the orders you have requested. If the court has any issues or questions about your application, they will notify your Lawyer. At this stage, your Lawyer will advise you if the court requires any amendments or further information.
There is no question that family law separations are one of the most stressful times in someone’s life, but our family Lawyers will do everything they can to make the process as easy as possible for you. If you are in this situation, it is our strong recommendation that you attempt to resolve the matter amicably with your former partner and without the need to go to court. It is equally as important however, that any agreement which you reach is formalised. The process of formalising an agreement takes time and effort but is usually resolved in between one and two months, but it could be longer depending on how long the court takes to process the application. More importantly however, it is the only way to protect yourself from further claims from your former partner without physically attending court.
If you have recently separated, we recommend that you make an appointment with one of our family Lawyers to discuss your options. We offer a free initial appointment to all new family law clients.