Should I finalise my family law property dispute through lawyers?
Should I finalise my family law property dispute through lawyers or can I prepare the agreement myself?
There are no rules or regulations in the Family Law jurisdiction that require you or your ex-spouse to formalise a property settlement in writing or through lawyers, and it is possible to prepare some of the documents yourself.
However, as will be evident below, it is advisable to have your property settlement prepared through lawyers, as preparing them yourself, or settling informally without anything in writing, has many risks, which may cause problems for you down the track.
If you want to formalise your property settlement in writing, it must take one of the two following forms, if reached by agreement with your spouse:
- Financial Agreement; or
- Consent Orders.
A Financial Agreement is a private contract entered into under the Family Law Act which ousts the jurisdiction of the Family Courts. It can be entered before a de facto relationship or marriage, during a de facto relationship or marriage, or after separation or divorce. It is a requirement however, that for a Financial Agreement to be binding, each party must receive independent legal advice. Therefore, if you want to formalise your settlement by way of a Financial Agreement, you will both need lawyers. If a Financial Agreement is prepared without lawyers, it will not be binding and not worth the paper it is written on.
Consent Orders are Orders of the Court that are made by agreement, without the need for a court appearance. They can be obtained by filing two forms with the Court – an Application for Consent Orders and a Minute of Consent Orders. It is not required that a lawyer prepares the documents, however, as it is a Court Order and will affect your legal rights now and into the future, it is recommended that you seek legal advice before attempting to prepare these documents yourself.
We set out the following reasons why it is important to legally formalise your property settlement, and why engaging lawyers who primarily practice or specialise in family law is prudent:
- Your ex-spouse may bring an application to the Court at a later date if your agreement is not prepared properly. Without an agreement in the appropriate form or Orders and containing particular information, it is possible for your former partner to apply to the Family Courts at a later date for a claim against your assets, despite the parties having already agreed on their property settlement.
By having your Agreement or Orders prepared by a lawyer, you minimise the risk of ending up in the Family Courts years down the track.
- The Family Court does not simply make Orders just because the parties request that Consent Orders are made. The Family Court needs to be satisfied that the proposed property Orders are just and equitable. An experienced family lawyer will be able to advise you on your entitlements and review any proposed settlement to consider whether it is just and equitable, and therefore likely to be made by the Court.
- You will not be entitled to certain tax benefits if your agreement is not prepared in the appropriate format. Capital Gains Tax and Stamp Duty Tax are both liabilities that are often relevant in Family Law proceedings and may be payable, particularly if assets are being transferred between spouses, or being sold as part of the settlement.
It may be possible to get exemptions from paying these liabilities if your agreement is prepared correctly. Without an agreement prepared in the correct form, you will not receive these exemptions, which can often be quite substantial. If there are any taxation consequences as the result of a settlement, your family lawyer will be able to advise you on the best way to structure any agreement to ensure that your liability is minimised, or at least shared with your spouse.
- If you prepare the agreement yourself, you may make an error that cannot be cured at a later date. If you have not included an important provision that would have protected you against certain liabilities, or transferred a particular asset into your name, then you may find that you are unable to have the Orders changed, and therefore are stuck in your current position.
Having your agreement prepared by an experienced family layer will put your mind at ease to know that the agreement has been drawn up by a professional, and that the issues in your case are being addressed by a an expert, minimising the possibility that these issues will come back to bite you in the future.
This short article barely scratches the surface on the issues that can arise if you do not formalise a property settlement through a lawyer. It is always best to obtain legal advice early if you are unsure of which path you should take.
If you have reached an agreement with your former partner and wish to have it formalised by a family lawyer, or if you have any other query in relation to Family Law, please contact our office and we can assist you with your query.
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