Upon the breakdown of a relationship, often parties are able to reach an agreement about the division of their assets and liabilities between them or can do so with the assistance of their lawyers or mediator.
This agreement can them be formalised either by Consent Orders made in the Family Court of Australia or by way of a Financial Agreement (also known as a Binding Financial Agreement or post nuptial agreement). The agreement must be considered by the Court to be just and equitable to the parties.
The benefits of formalising your agreement by way of Consent Orders include:
- Concessions on stamp duty payable on the transfer of real estate and other property. In the Northern Territory no stamp duty is payable. In other states, nominal duty may be payable, for example in WA nominal duty of $20 is payable on each transfer;
- Capital gains tax (CGT) rollover – This means that CGT is not payable at the time the property is transferred pursuant to Family Court orders. For further information, please discuss this will your accountant and/or consider information on the ATO’s website
- The parties can split (divide and transfer) superannuation between them;
- The orders are enforceable;
- Provides finality to your financial relationship.
Unfortunately, if parties do not formalise their agreement with Consent Orders (or a Financial Agreement) then any verbal or written agreement is not enforceable and can be terminated by (or reneged on by) either party at any time.
At Torney Legal we see many instances where the parties have prepared their own agreement and issues have arisen usually because:
- The Application has been completed incorrectly or parts of the Application have not been submitted to the Court;
- The Orders sought are not in the correct format;
- Issues have arisen with regards to the Orders made as self prepared Orders have not taken into account all circumstances.
Therefore, at Torney Legal we recommend that you have a lawyer prepare your Application for Consent Orders or at least review your Application.
At Torney Legal, if you and your former spouse have reached an agreement we can prepare your Application or review your application at an affordable fixed fee cost.
If you are married, you do not need to wait until you are divorced to finalise property matters.