When a couple separates, it can be all too tempting to just make a quick and informal agreement about property to move forward as early as possible, away from the anguish surrounding the relationship breakdown.
What many people don’t know is that informal agreements dividing assets are not necessarily enforceable. When there is no enforceable agreement recording how property is to be dealt with at the end of a marriage or de facto relationship, the door remains wide open for the other person to have “another bite at the cherry”. That means that either party to the broken-down marriage or de facto relationship can make an application to the Court for property orders in the absence of court orders or a binding financial agreement.
It can be particularly risky or complicated in circumstances where one person moves onwards and upwards, continues to accrue assets or grow their own property after separation, or even mixes their finances with a new partner. This is because all property is included in the “pool” available for adjustment as at the time of trial or agreement. Whilst you may be able to argue you should keep all or the lion’s share of a particular asset due to your contributions to it after separation, there is no hard and fast rule and your assets may well be vulnerable. Many factors will be taken into account by the Court, however post-separation earnings and accrued assets are not necessarily safe from the reach of the other person.
Married people have up until 12 months after a divorce order takes effect to make an application to the Court for property settlement and/or spousal maintenance. The time limit for people to file an application for property settlement or maintenance after a de facto relationship ends is 2 years after the date of separation. Even after these time limits, an application can be made to Court on certain grounds to proceed with an application even when it is out of time.
Finality with financial affairs after separation is important to allow you to make decisions with certainty that will benefit you and those you care about moving forward. Recording a binding and enforceable property settlement can assist with this finality, to ensure that what you keep remains yours and you are free from any claim for property in the future. There are a couple of ways to record an agreement, with the most cost effective often being an application for consent orders through the Court. Neither party will need to attend Court as the application is considered in-house, unless the Court considers the agreement reached is unjust or inequitable to one party.
There are also ways to limit your spouse from making an application against you in the future for spouse maintenance, with the same options applying to de facto couples after separation.
We have helped many clients record their property settlement agreements cost effectively and efficiently. Usually, we can draft all of the documents you need within a matter of days if we have all of the relevant information and an agreement has been reached. Contact us today to discuss how we can help you move forward with finality.