We are often approached by clients who say, why do I need a Consent Order of Binding Financial Agreement, when we have agreed how our assets should be divided already?
The short answer is, to protect you.
As family lawyers, we see many scenarios that render our clients vulnerable to adverse consequences.
We often see situations where despite parties agreeing to the terms of a settlement, one or both parties later change their mind(s). This can cause our clients a lot of stress, unnecessary expense and delay.
Defined asset pool:
Many of our clients do not appreciate that an asset pool is always changing. The court will not necessarily accept that an asset pool is defined by the assets held at the date of separation. In fact, in most circumstances the court defines the asset pool by the assets held at the time of entering into an agreement.
Many of our clients post-separation go on to build up a business, receive an inheritance or purchase a different property. Most clients’ superannuation balances also increase as time passes. In the event you have not documented and legalised a settlement, then arguably, those assets can be claimed upon, by your ex-spouse.
Did you know if you are in a de facto relationship, you only have two years post-separation to make a claim for a property settlement? If you were married and then divorce, you only have one year post-divorce to make a claim. In the event you fail to legalise an agreement during that period, it may be that you cannot make a claim at all. The court has the discretion to refuse to make an order for a property settlement if these time periods have lapsed.
During the course of instructing us to prepare documents for you, we are able to offer advice which can in turn provide you with significant cost savings. The most obvious savings to you by entering a Consent Order or Binding Financial Agreement is stamp duty. The transfer of matrimonial assets such as a house or a motor vehicle, would usually attract stamp duty. Pursuant to a Consent Order or Binding Financial Agreement these transfers are stamp duty exempt.
Similarly you can avoid capital gains tax on assets such as shares, if the transfer is done pursuant to a Consent Order or Binding Financial Agreement.
A situation many never consider is, what if my ex-spouse dies prior to an agreement being legalised? In this situation, assets you may have been entitled to, would form part of the deceased estate and could be distributed pursuant to the terms of their Will. Any jointly owned asset will automatically pass to the other party, which may not be what your testamentary wishes are.
At Hume Taylor & Co, we offer specialised advice on drafting Consent Orders and Binding Financial Agreements. We offer value to you and provide efficient and cost-effective services. We are also versed in estate planning and can assist you to update your Will. Please contact one of our experienced family lawyers today on (08) 8223 3199 to arrange a consultation.