To some people, dividing assets after separation simply means transferring cash and property between each other on a handshake. However, this does not satisfy section 81 of the Family Law Act 1975 (Cth) because these types of agreements:
a) do not finalise the financial relationship between parties; and
b) do not prevent further litigation.
It is important to obtain Family Court orders to formalise a property settlement. The parties can obtain Court orders through litigation or by consent (agreement).
Advantages of Family Court Orders
Once a property settlement is formalised by way of Family Court orders, the parties will enjoy the following benefits:
a) certainty as to their property rights;
b) protection form their former party “changing their mind”;
c) protection from any future claims from their former partner;
d) nominal stamp duty payable on transactions required by the orders; and
e) Capital Gains Tax rollover relief on transactions required by the orders.
Some parties are reluctant to formalise a property agreement on the basis of the legal costs involved. Even if the parties reach an agreement, they are likely to incur:
a) legal fees for the preparation of Court documents to seek the orders; and
b) Family Court filing fees.
However, the risks and costs associated with not having the protection of Court orders far outweigh the legal costs of obtaining those orders. In family law matters, parties can change their minds quite frequently and it can be disastrous when this occurs. Formalising any agreement through Court orders is the only way to achieve certainty and security.
This is general information only, and does not constitute specific legal advice. If you would like further information in relation to this matter or other legal matters please contact our office on Freecall 1800 609 945 or email us now.