Consent Orders – What are they and why do I need them?
If you and your de facto partner or your spouse have separated (whether recently or years ago), it is important to finalise your financial relationship. If you have reached an agreement between yourselves, your agreement can be documented either in Consent Court Orders filed by agreement or through entering into a Binding Financial Agreement. In this blog we have outlined some Frequently Asked Questions in relation to Consent Orders for property settlements.
We have reached our own agreement, why can’t we just shake on it and go our separate ways?
Firstly, if you are able to reach your own agreement, fantastic!
Secondly, a handshake deal, or even a document signed by the two of you in relation to property settlement, isn’t legally binding. This means if one of you changed your mind in the future, you have no protection. Any agreement in relation to the division of property between spouses or de facto partners needs to be formerly documented.
If we have reached an agreement, why does the Court need to be involved?
If you have reached an agreement between the two of you, you can complete an Application for Consent Orders and Terms of Settlement which outline the agreement. Nobody actually goes to Court, the documents are just filed with the Court, who will then review the Orders and generally makes them within 28 days (provided there are no issues with the Orders). This means they become legally enforceable.
What are the benefits of having Court Orders?
- The agreement becomes legally enforceable. This means in the future if things go pear-shaped, you will be able to rely on the Court Orders to make sure your former partner/spouse follows through on their end of the agreement.
- You will avoid stamp duty. If you are transferring property (including real estate and cars) between spouses/partners, the transaction is stamp duty exempt. The stamp duty exemption is only effective if the transfer is pursuant to Court Orders (either by consent or otherwise) or a Binding Financial Agreement.
- You will be protected in the future. This is important if for example one of you were to win the lotto or buy another property. If you have properly documented your financial agreement with Court Orders, you are not exposed to a potential further claim by that former partner.