Reaching Fair Agreements
Spouses cannot apply for divorce until they have been separated for at least 12 months.
Separated spouses are not obliged to make an application for divorce as soon as the 12 months has expired. They may stay married for a longer period of time.
Important issues relating to children, property and finances can be resolved immediately after separation, whether a divorce is sought or not.
Separation means the breakdown in the marital relationship as a whole. There is not one single event that determines separation. Generally, separation is taken to occur when spouses cease to have lived together in the same household. The court may take into account, however, periods of time when the parties are living separately under the same roof. In determining whether the parties have been living separately under the same roof, the court will look at a range of factors to decide if the parties have truly separated or not.
These factors include whether the parties have:
If parties resume living together after initial separation, and the resumption of cohabitation is no more than three months, the earlier period of separation may be added to the later period of separation in calculating the necessary 12 months for the divorce.
There is no need to take any steps to register or formalise the initial separation. The court will generally accept the evidence of a party as to that of separation – unless it is disputed by the other party.
Applications for divorce must be made in the Federal Magistrate’s Court. The application may not be filed until 12 months after the separation. A filing fee is payable, but it may be waived depending on the financial circumstances of the applicant. A copy of the Marriage Certificate must also be filed. If you have lost your Marriage Certificate, a copy can be obtained from the Registry of Births, Deaths and Marriages.
Generally, one spouse makes the application for divorce, and the other spouse is the respondent. The application must be served on the respondent. The correct serving of the application is essential. If there is not proper evidence of the application being served on the other spouse, the court will not grant the divorce at the first hearing date. The hearing will need to be adjourned to allow for proper service of the divorce application.
The divorce application contains details of the marriage including date of separation. It must also contain sufficient details to allow the court to determine whether proper arrangements have been made for any children of the marriage who are under the age of eighteen years. You should be careful in providing these details. The information may become relevant if there are subsequent disputes in respect of arrangements for the children.
If you have been married for less than two years, a certificate from a counsellor must be filed with the divorce application indicating that you and your spouse have considered reconciliation with the assistance of the counsellor. In some circumstances, the court may be persuaded to waive the counselling requirements.
When filed, the divorce application will be given a hearing date in about six to eight weeks. The application must be served on the respondent at least twenty-eight days before the hearing, or forty-two days when the other party is served outside of Australia. The respondent may dispute the divorce application if they disagree with the date of separation or dispute whether appropriate arrangements have been made for the children. In most cases, however, the respondent does not appear at the hearing.
At the hearing, it is necessary that you prove your spouse has been properly served within the required time period. This is generally done by the filing of an Affidavit of Service by the person who served the application on the respondent (which cannot be the applicant). Service can be done by post provided the respondent signs an Acknowledgement of Service in the time period of service. At the hearing, the court may ask additional questions about arrangements for any children.
If the court is satisfied that the application meets the requirements of the Family Law Act for divorce, a Decree Nisi will be granted at the hearing. That Decree becomes final or absolute one month and one day after the hearing.
The court will issue a divorce certificate a few weeks after the hearing.
A divorce has no effect on the rights, obligations, or entitlements of the parties about property, child support, or children.
Any application in respect of property or spousal maintenance can be made either before a divorce or within twelve months after the divorce becomes absolute. After twelve months from the divorce, a property application or spousal maintenance application can only be filed with the consent of the other party or with special leave of the court.
Applications for orders in respect of children can be made at any time.
Divorce does not revoke any wills of the spouses. The divorce, however, will terminate any gifts made in the will by one spouse to the other or any appointment of them as executor, trustee, or guardian. You should review your will following divorce and check whether it still has the effect you desire. For further details, see our other information sheet in respect of Separation and your Will.
Spouses are free to re-marry following the divorce becoming absolute. A marriage celebrant may request to see the divorce Decree prior to a subsequent wedding.
The divorce may effect the entitlement to a spouse under superannuation or insurance policies. It may also effect entitlements for social security, tax benefits, and immigration status.
Working out what is best for the children is a priority of most separating parents.
Happily, most separating parents reach agreement relatively easily in respect of arrangements for their children. These arrangements can be agreed on an informal, non-enforceable basis or reflected in consent orders.
In a small number of cases, parents are unable to reach agreement and it is necessary to commence court proceedings.
Working out what is best for the children is a priority for all separating parents. Happily, most separating parents reach agreements with each other relatively easily in respect of the arrangements for the care of their children. Generally, these agreements are made informally without any legal procedures. Ideally, parents are able to informally review and re-arrange these agreements to reflect the changing needs of the children.
There are different process parents can use to discuss and reach good agreement about their children. Processes include mediation and family dispute resolution, and collaborative family law. Matthew Shepherd is a mediator and family dispute resolution practitioner and can help both parents reach good parenting agreements. Matthew is a trained collaborative practitioner and assist parents who choose to use collaborative family law.
If arrangements for the children are agreed, parents then need to decide how they wish to document the agreement. They can keep the agreement on an informal verbal basis. If so, the effect of the Family Law Act is that both parents retain equal parental responsibility. Legally, neither has any greater or lesser responsibilities in the lives of their children than the other. Informal agreements however, are not legally binding or enforceable.
In some circumstances, parents may wish to document their agreements in legally binding and enforceable court orders, or parenting plans. This may avoid on-going disputes or discussions in respect of week-to-week arrangements for the children. Written parenting plans are not enforceable and do not prevent a parent making a subsequent application to a court. Consent orders are enforceable and are as final as if a Judge had decided the case. Orders may also protect children from being removed from the usual place of residence or from Australia.
A minority of parents cannot reach agreements in respect of care of their children after separation. If so, one or both parents may wish to make an application to the court for parenting orders. Court proceedings damage the relationship between parents and create great stress for parents and children. A court can make different orders to those sought by either parents. Neither parent, and certainly at least one, will be unhappy with the court decision creating difficulties with their willing implementation of the orders. All court orders can do is apportion children’s time between parents – they cannot change the personality of attitudes of either parent.
In most cases, parents are obliged to attempt family dispute resolution (a special type of mediation) before applying to a court for parenting orders. This is to see if parents can reach their own agreement and avoid court. Matthew Shepherd is a family dispute resolution practitioner and can help separated parents to engage in effective dispute resolution about their children.
There are three main types of parenting orders:
Generally, parents seek parenting orders from a court. The Family Law Act however, allows any person who has a relationship with the child to seek parenting orders including relatives and friends.
The child’s best interest is the paramount consideration when making Parenting Orders (Section 60CA).
Section 61DA creates a presumption that it is in the best interests of a child for both parents to have equal shared parental responsibility except if there are reasonable grounds to believe the child may be subjected to abuse or family violence. Equal shared parental responsibility does not relate to the amount of time a child spends with each parent – rather it relates to decision-making responsibilities including issues such as education, names, religion, medical treatment, extra curricular activities etc.
Section 65DAA provides that where equal shared parental responsibility applies, the Court must, firstly, consider whether the child spending equal time with each parent would be in its best interests and be reasonably practicable (taking into account the factors listed in Section 65DAA(5)).
If a Court determines that equal time is not in the child’s best interests or not reasonably practicable, it must consider whether the child spending substantial and significant time with each parent would be in its best interests and reasonably practicable. Substantial and significant time is defined as time that both falls on weekends and holidays, and also during school weeks, and is time which allows the parents to be involved in the child’s daily routine and events that are of particular significance. Arguably, a child spending a weekend commencing Friday afternoon and/or finishing Monday morning falls within this definition of significant and substantial time.
Some parents have misunderstood that the effect of the Act is that there is a presumption that children living with each parent is in their best interests or is a starting point. This misunderstanding is a simplification of the effect of the Act as applies to children. Parents (and Courts if asked) need to consider the particular circumstances of their children in determining what is in their best interests.
Except in special circumstances (such as child abuse, family violence or urgency) a parent cannot make an application to the Court for parenting orders without first having attempted family dispute resolution and obtaining a Section 60I Counsellor’s Certificate. See our page in respect of family dispute resolution for further details.
An application for interim or urgent parenting orders can be heard by the court within a few weeks. At an interim hearing, the court will generally continue the pre-existing status quo arrangements for the care of the child unless they pose some risk to the child.
Applications for final orders may take many months before they are heard by the court. Before the final hearing, the court will require that the parties participate in counselling and other forms of dispute resolution. As a result, the majority of parenting applications are resolved by agreement and do not proceed to a final hearing.
If a parenting application proceeds to a final hearing, it is common for a family report to be prepared by a court counsellor or child psychologist. The report will address any wishes of the child and may make recommendations as to what is in their best interests.
In some cases, a lawyer (called the child’s representative) may be appointed to represent the children before the court. The children, however, would not attend at the court hearing or give evidence.
Parenting orders are not final. Parents may seek to change parenting orders. Unless both parents agree, the court would need to be persuaded that there has been a change in the circumstances of the child since the earlier orders were made, and that the proposed change is in the children’s best interests.
Most separated parents reach parenting agreements relatively easily and informally – perhaps with the assistance of family lawyers and mediators. The methods parents use to reach agreements have a big impact on the quality of the agreement. Methods include mediation and family dispute resolution, and collaborative family law. Matthew Shepherd is a mediator and family dispute resolution practitioner and can help both parents reach good parenting agreements. Matthew is a trained collaborative practitioner and assist parents who choose to use collaborative family law.
In most cases, parents are obliged to attempt family dispute resolution (a special type of mediation) before applying to a court for parenting orders. This is to see if parents can reach their own agreement and avoid court. Matthew Shepherd is a family dispute resolution practitioner and can help separated parents engage in effective dispute resolution about their children.
To commence a court application for parenting orders, a parent must obtain a certificate from a family dispute resolution which will state one of the following:
The certificate is not necessary for the commencement of Court proceedings in certain circumstances being:
Large government funded family relationship centres provide dispute resolution services to separated families and to issue the certificate if required. There are also private mediators who can do so. Private mediators cost more than a family relationship center but can often provide mediation more quickly and privately, and customise the process to meet the needs of the family.
Family dispute resolution practitioners are mediators assisting parents in reaching agreement. They are independent and neutral, and do not takes sides. They cannot force parents to reach agreements or to enter into parenting plans. They cannot give legal advice. Parenting arrangements (whether reflected in parenting plans or court orders or not) have financial ramifications on issues including on property settlements and child support.
Whilst family dispute resolution practitioners are independent, they have obligations prescribed by the Family Law Act including to advise parents that they should consider children spending equal time with each parent if it is reasonably practicable and in the best interests of the children, and if not, consider whether it is reasonably practicable and in the best interests of children to spend substantial and significant time with each of them. Further, they are required to inform parents they should consider entering into a parenting plan. Parenting plans are important documents that whilst not legally enforceable can override Parenting Orders in certain circumstances. They should only be entered into after careful consideration.
Getting the Best Results from Mediation and Dispute Resolution
Look at Matthew’s guide to getting the best results from mediation.
Separated parents may reach agreements in respect of the financial support of their children. In the absence of agreement, either parent may apply to the Child Support Agency (“CSA”) for an assessment of the other parent for child support. The CSA has a number of formulas using the taxable income of the parents.
The CSA has a number of different formulas. The most commonly used formula takes into account both parent’s taxable incomes (less to the same self support amount for both parents). The total combined child support income for each parent (disregarding the self support amount) is then used to determine the average cost spent by parents on their children reflecting their income level. Those costs are apportioned between the parents reflecting their share of the combined child support income and also the care arrangements for the children.
We can perform the child support calculations for you and explain how they work.
The assessment can be reviewed by a child support review officer in special circumstances including:
If a parent is dissatisfied with the decision of the child support review officer, an application may be filed in the court seeking variation of child support.
The CSA can only issue assessments in respect of children under the age of eighteen years or, where children turn eighteen in their last year of school, until the end of their last year of school. Applications must be made before the child turns 18. Applications may be made to a court in respect of child maintenance for children over eighteen who have left school.
Separated parents can enter into two different types of child support agreements.
Limited child support agreements must be in writing and signed by each party. They can only be made in relation to a child in respect of whom an application for administrative assessment could be made. That is, a child who is under 18 year, not in a relationship of their own, is in Australia or is an Australian Citizen or has an ordinary residence in Australia. There must be an administrative assessment of child support in place in respect of the child. A limited child support agreement has no effect unless and until it is accepted by the Child Support Agency.
The agency is only able to accept a limited child support agreement which provides for a level of child support which is not less than the rate that would otherwise be payable under a formula assessment. This can include provision for child support of a non-parenting manner. That is, by way of a lump sum or payment of expenses directly to third parties.
Significantly, a limited child support agreement can be unilaterally terminated by one parent by giving written notice following the expiry of three years from entering into the agreement, or upon the amount to be paid pursuant to the Agreement deviating more than 15 % from child support payable pursuant to a formula assessment.
A limited child support agreement can be terminated in the following ways:
Limited child support agreements therefore have much less certainty and finality than binding child support agreements. Limited child support agreements have a statutory sunset clause of three years (whether stated in the agreement or not). Lawyers advising in respect of child support agreements will need to consider whether the agreement is intended to be and is, in fact, a limited or a binding child support.
Binding child support agreements must meet the same requirements as for a limited child support agreement excepting the following two points:
A Binding Child Support Agreements can provide for the payment of less child support than would be payable under a formula assessment. This can however impact on a parent’s entitlement to Family Tax Benefit. Family Tax Benefit Part A will be calculated as if the child support agreement had not been made. That is, it will be calculated as if the payee parent had been receiving child support at the amount payable pursuant to a formula assessment.
To facilitate this, the Child Support Agency must issue a Provisional Notional Assessment when accepting a child support agreement, setting out what would be payable without the agreement.
Lawyers providing the necessary independent legal advice in respect of binding child support agreements should explain the impact of child support agreements on the entitlement of parents to receive Family Tax Benefit Part A.
Binding child support agreements cannot be unilaterally terminated in the same way as Limited Child Support Agreements. They can only be terminated as follows:
Section 136 of the Child Support (Assessment) Act has been amended to allow for a court to set aside a child support agreement in certain circumstances including:
A parent or a child can make an application to a court seeking that one or both parents make payments to the child or the other parent to meet the costs of the child. This can only be done when the child needs the ongoing financial support due to health or educational reasons. The most common ground to seek child maintenance is when the child is attending tertiary education.
In assessing child maintenance for children over the age of eighteen years, there is no standard formula used by the court. The court will look at the following factors:
The majority of separated couples reach negotiated agreements in respect of property settlements without going to court. Generally, they will enter into Consent Orders or a Financial Agreement to document the settlement and determine their respective obligations and entitlements.
The following discussion applies to married couples, and also applies to de facto couples (both opposite sex and same sex) who separate on or after 1 March 2009. This is provided that the de facto partners have cohabitated for at least two years, or there is a child of the relationship, or a party has made substantial contributions and would suffer serious injustice. A minority of separated couples are unable to reach negotiated agreements. One or both parties will make application to a court for property settlement. Only between 5–10% of applications filed for property settlement proceed to a final hearing. The other 90–95% will reach a negotiated agreement during the course of court proceedings. Preparation of a well planned negotiating strategy can assist spouses in reaching a satisfactory settlement promptly and without unnecessary conflict. This should include considering what dispute resolution process might be most effective – mediation, collaborative family law, arbitration, lawyer-to-lawyer negotiation, direct discussion between the spouses? The dispute resolution process chosen has a big impact on the quality of the agreements reached.
An application for property settlement can be commenced any time after separation, but must be commenced by a married spouse within twelve months after the granting of a divorce. After that time period, special leave must be given by the court.Generally, a de facto spouse must make an application for property settlement or spousal maintenance within two years of separation. A court application cannot be made by a de facto partner more than two years after separation without special leave from a court.
In most cases, the court follows four steps in deciding a fair property settlement.
Step 1: Identifying and valuing all property and debts of the parties
Generally, all property and debts of each party (whether individual or joint) form part of the assets which will be available for division – irrespective of whether the asset was received or the liability incurred before or after cohabitation or separation. The asset pool should include all possible tax liabilities and the costs of selling or transferring properties.
Step 2: Assessing contributions made by each party to the property of the relationship including:
Step 3: Consider the future financial needs of each party
Section 75(2) of the Family Law Act requires a court to consider a number of factors including:
Step 4: Consider how each party is to receive the entitlement determined under Steps 1, 2, and 3
That is, how are the assets of parties to be distributed between them. In many cases, it is necessary to sell a property to allow each party to receive their entitlement from the sale proceeds.
Generally, the court takes a global approach as outlined in the four step process above. In a short relationship without children, the court may take an asset by asset approach. This involves considering the contributions made by each party to each individual asset. Less weight is given to the differing future financial needs of each party.
Regrettably, some personal relationships can be marred by allegations of violence – especially at the time of the relationship breakdown and separation. Alleged or actual family violence has a significant impact on both spouses and the children, and the efficient resolution of financial and legal issues arising on separation. Family violence is defined legally to not just be physical violence, but also psychological and controlling and coercive behavior.
Consequences of family violence include:
Family violence is damaging children and causes time long term trauma psychological harm. It effects their adult lives and their ability to form their own healthy relationships.
In respect of violence between spouses, the most common criminal charge is assault. Police will not generally bring criminal charges unless there are reasonable prospects of proving the charges beyond reasonable doubt.
An AVO can be made in the Local Court if the person in need of protection (“PINOP”) has reasonable grounds to fear, and in fact fears:
The PINOP does not have to be physically assaulted or to suffer actual abuse. Intimidation, harassment, or threats of damage to property are sufficient. The burden of proof is balance of probability. It is therefore easier for a court to be satisfied to impose an AVO than to make a guilty finding of assault.
The PINOP may make an application for an AVO or the police may apply on their behalf. The police are obliged to apply where they suspect or believe a domestic violence offence has been, or is likely to be, committed. When the police bring the application, the PINOP must be represented by the police prosecutor. Where an individual applies for the AVO, they may represent themselves and have a private lawyer appear for them.
In exceptional circumstances, the police can obtain a telephone AVO from a magistrate which will remain effective for a short period until the matter is listed in court.
At the first court date, the defendant is entitled to be represented by a lawyer. Legal Aid is not generally available for defendants to AVOs. The defendant may consent to the AVO “without admissions”. If the defendant does not consent, the matter will be set down for a hearing at a later date. At the hearing, both parties and any relevant witnesses will give evidence. Each party is entitled to cross-examine the other party and their witnesses.
AVOs are commonly made for a period of between six months to two years, although they can be made for longer periods. The making of a final AVO automatically disqualifies any fire-arms licence of the respondent.
The making of an AVO does not constitute a criminal offence. A breach of an AVO – if proved – is a criminal offence. A report of an alleged breach of an AVO will result in arrest and criminal charges being laid.
Depending on the terms of the AVO, an AVO may restrict contact by the defendant to children. A court order allowing contact will prevail over an AVO.
Separately from AVOs, domestic violence may give grounds for a spouse to seek a sole occupancy order of the matrimonial home from the Family Court. Allegations of domestic violence will be taken into account by the Family Court in considering parenting arrangements for children after separation. In some cases, the Family Court has found domestic violence to be relevant in dividing the property of the marriage. The contributions of a party to the property of the marriage whilst suffering from domestic violence may be seen by the court to have been greater than if no domestic violence had taken place. A spouse who has suffered domestic violence may in some circumstances be able to seek compensation from the other spouse.
Australia has high migration levels and an extremely mobile population. Separations therefore often raise international law problems. A spouse may wish to move to or from Australia – possibly with the children. Marital property may be located outside of Australia – or moved in or out of Australia. One or both spouses may be advantaged or disadvantaged by whether family law issues are resolved in or outside of Australia.
Early consideration of these issues may simplify negotiations and litigation. Listed below are common international family law issues that need to be considered – but the list is not exhaustive. You should obtain expert advice in respect of your specific circumstances.
Tips: The place of the divorce may effect the choice of jurisdiction for resolving parenting and property matters. An Australian divorce may stop a party seeking property orders in other jurisdictions. Parties must bring an application for property settlement or spousal maintenance in Australia within twelve months of an Australian divorce. This time period does not apply however where the divorce has been granted outside of Australia.
Note: The Australian Family Court may make orders in relation to property outside of Australia – although difficulties might be experienced in enforcing the orders. The Australian Family Court, however, cannot make “super splitting” orders dividing superannuation or pension interests held outside of Australia. A spouse’s entitlement to such interests however may be taken into account in determining a fair division of the other property.
In some circumstances, the Australian Family Court may decline to exercise its jurisdiction to hear an application for property settlement or spousal maintenance. The Australian Family Court would need to be persuaded that it was a clearly inappropriate forum to hear the proceedings. This can be a difficult test to satisfy.
By contrast, courts in some other countries may be persuaded not to exercise jurisdiction unless it is the most convenient forum.
An application can therefore be made to the Australian Family Court in respect of a child who is residing outside of Australia. In some circumstances, however, the Australian Family Court may decline to exercise its jurisdiction if it is contrary to the welfare of the child.
All of these criteria must be met for the CSA to have jurisdiction.
The CSA however can issue assessments if the applicant or liable parent is in a foreign country with which Australia has reciprocal enforcement obligations.
If there is no reciprocal enforcement agreement between Australia and the foreign country, a parent may still be able to seek child maintenance via an application to the Australian Family Court provided:
Solicitors are required to provide written costs agreements to clients explaining how they charge. Family law solicitors generally charge by time. A costs agreement may provide for the charging of time spent by both the solicitor and also support staff such as clerks, paralegals, and secretaries. Generally, disbursements (such as search fees, registration and filing fees, faxing and photocopying etc) are also charged. GST is payable on legal bills.
Family law solicitors cannot predict exactly how long it may take for a family law settlement to be agreed. This largely depends on the attitude taken by the spouses. A family law solicitor can therefore not exactly estimate the likely fees to be incurred. A family law solicitor, however, should be able to provide a range of likely costs.
When offers of settlement are made, consider the likely future costs if the offer is not accepted. If the likely future costs are similar or greater to the differences in offers made in respect of you and your spouse, you should accept the offer.
You will save significant legal costs by reaching agreement without going to court. Settlement can be reached through private discussion, counselling, mediation, or by negotiations through lawyers.
Generally, agreements will be documented by the making of consent orders in the Family Court or the Federal Magistrate’s Court. There is no need for a court appearance when making consent orders.
Court proceedings involve significant time by lawyers in the following preparation and presentation of your case. Costs can be controlled in the following ways:
It is difficult and nerve-wracking giving evidence in court.
Here are some rules to make it easier.
Be polite and courteous to everyone – including your spouse and their lawyer. Do not glare or point at your spouse. Even when you are not giving evidence but sitting next to or behind your lawyer, do not pull faces or express your views through noises. Communicate calmly with your lawyer by whispering or passing short notes.
Tips to protect yourself.
Planning for separation and divorce can assist you in resolving legal and financial issues more quickly, favourably, and cost effectively.
Here are some tips to help you:
Information is power when negotiating family law settlements. After separation, it may be difficult to access financial documents – particularly those held by your spouse. Obtaining documents and information for court proceedings and the issuing of a subpoena can be expensive.
You can save significant time, stress and costs by collating or copying important financial documents. You should review the contents of the home to locate the following documents:
Sources of information
Other business records
Sources of further information
We can assist you in obtaining additional information (without knowledge of your spouse) including: Searches for real estate bought or sold by your spouse or companies in which they have an interest.
Separated spouses need to carefully review their Wills – presuming they have one.
Separation does not revoke or affect your Will. Any gifts in your Will to your separated spouse will continue to be effective. If a spouse dies without a Will, they die intestate. This means that their property will be distributed according to a prescribed system by which in most cases their separated spouse will receive all or the majority of their assets.
Gifts made by a spouse in their Will are revoked upon divorce. If their Will left all of their assets to their former spouse, it will no longer be effective, and there will be confusion as to the entitlement of other possible beneficiaries.
Most spouses purchase real estate (especially their primary residential property) as joint tenants. This means that the interest of one joint tenant automatically passes to the other on their death – irrespective of provisions made in their Will.
Separating spouses should therefore consider making a new Will. Matters to be considered are:
In addition to changing their Will, a separated spouse should also consider the following estate planning issues:
Power of Attorney
A Power of Attorney authorises a person or persons to deal with your financial affairs on your behalf. The appointment must meet various formalistic requirements and be signed by you and your designated Attorney before a witness. The extent of the authority given to your Attorney can be defined by you. The Power of Attorney enables the appointed person to look after your assets and financial affairs on your behalf. This can include allowing them to act on your behalf when you are no longer capable of making financial decisions for yourself due to illness or disability.
The appointment of an Enduring Guardian allows you to appoint a person or persons to make decisions about your personal welfare when you are no longer able to do so yourself. The appointment must be in writing and signed by you. The authority only comes into effect once you are incapable of making decisions for yourself.
Almost 50% of all Australian marriages end in divorce. The breakdown of de facto relationships is greater. Separated spouses may seek a share of the assets of the relationship. This includes assets held both jointly and solely by the other spouse – irrespective of whether the assets were acquired before the commencement of the relationship or after separation.
Married and de facto couples can enter into formal agreements defining their respective entitlements even if separated. These agreements can therefore avoid legal disputes arising after separation. They can also reduce the possibility of disagreement arising between the parties during the relationship. A full discussion and agreement in respect of domestic finances can assist the health of the relationship and avoid relationship breakdown.
The Family Law Act allows married couples and de facto spouses to enter into Financial Agreements before entering marrying or commencing de facto relationships, and also during marriages and de facto relationships. If the Agreement has been properly made, a Court cannot make an order in respect of property settlement or spousal maintenance inconsistent with the Agreement except in limited circumstances. Each spouse must obtain independent legal advice about the agreement. There are some limited grounds on which a spouse can seek to setting aside of a Financial Agreement.
Financial Agreements require careful consideration and planning. It can be difficult to determine at the commencement of the relationship what might be a fair division of property at a future point in time. Commonly, following separation, one spouse will consider that the agreement is prejudicial to them by limiting the amount of property to which they otherwise would have been entitled. They may consider if there are grounds to vary or set aside the Agreement.
It is also important to review agreements from time to time on significant events such as the purchase of property, or the birth of children.
One or both spouses may not want to enter into a formal agreement such as discussed above. It is still possible to take practical steps which may limit the entitlement of the other spouse upon separation.
Such steps include:
Avoid having your partner work in your business. If they do, pay them an appropriate wage to avoid subsequent allegations of their non-financial contributions to your business.
Separating spouses (both married and unmarried) have many issues to resolve – including choosing the most appropriate decision making process. Early selection of the best process helps separating spouses reach the best possible agreements plus save time and money, and minimise acrimony.
The following chart compares the five main process choices.
(also known as family dispute resolution)
Lawyer to Lawyer negotiation
|Voluntary – both spouses must agree. Non adversarial.||Voluntary – both spouses must agree.Non adversarial.||Can focus on needs and interests of each spouse but usually adversarial and positional. Participation voluntary.||Voluntary – both spouses agree including choosing arbitrator. Adversarial.||Adversarial.Used when other side refuses to participate.|
Series of three way meetings between the mediator and spouses. Lawyers may also attend (if both spouses agree).
|Series of four way meetings of spouses and solicitors (as well as child consultants, financial professionals and coaches if both parties agree).||Negotiations are generally conducted by written communications and telephone calls between solicitors in the absence of spouses.||Process is flexible and can be agreed on by parties. Typically between 1 to 3 meetings with lawyers.||
Many court matters settle with negotiations based on likely court determined outcomes. These are unpredictable and may not meet all needs of the spouses and children.
Aims for win/win or best possible outcome for both spouses and the children.
|Aims for win/win or best possible outcome for both spouses and the children.||Lawyers endeavor to get as much as possible for their client and as least as possible for the other spouse.||Decision can be made from documents or with short submission or full hearing including oral evidence and cross examination.||
Lawyers endeavor to get as much as possible for their client (little as possible for the other spouse).
May take a few weeks.
|May take a month or two.||May take a few weeks or a number of months.||Lawyers aim to persuade arbitrator to give their client the maximum consistent with the law applied by courts.May take a month or two.||
Can take 2 or 3 years to proceed to final hearing.
|Role of mediator||
Mediator is neutral and independent. Gives information and identifies issues, but does not give advice. Facilitates constructive discussion and negotiations.
|Not applicable.||Not applicable.||Arbitrator is neutral and independent. Chosen by agreement of the parties. Applies the law (as applied by courts) as they see appropriate.||
Judge is neutral and independent, but parties have no choice over court allocation of judge. Must apply the law.
|Role of lawyers||
Spouses can seek advice prior to joint meetings and have lawyers review final agreements. Lawyers may attend at joint sessions if both parties wish.
|Advise and attend with clients at four way meetings. Act as a “team” to help spouses reach fair agreements. Communicate with and act non-adversarially with the other spouse.||Advise and negotiate with each other – generally in absence of clients.||Advise and advocate for client. Adversarial to other lawyer and spouse. Does not communicate with other spouse.||
Advises and advocates for client. Adversarial to other lawyer and spouse. Does not communicate with other spouse.
|Impact on relationship between spouses||
Can improve communication and relationship between spouses, and assist them to establish post separation parental alliance.
|Can improve communication and relationship between spouses, and assist them to establish post separation parental alliance.||Tends to create acrimony and mistrust between spouses. May damage their relationship as parents.||Not designed to support or foster a new post separation relationship. Adversarial approach may damage relationship.||
Causes spouses to become adversarial. Damages communications and relationships – especially as parents.
Least expensive. Fixed fees for joint sessions. No retainer. If experts required (valuations, accounting advice, child consultants), spouses typically agree single experts at shared cost.
|Less expensive than court. Hourly fees. No retainer. Total fees depend on number or meetings which spouses control. If experts required (valuations, accounting advice, child consultants), spouses typically agree single experts at shared cost.||Less expensive than court. Hourly fees. Total fees unpredictable and depend on amount of negotiations between lawyers.||Less expensive than court. Fees reasonably predictable once arbitration process agreed.||
Hourly fees. Total fees unpredictable and depend on approaches taken by each side and the court. Retainers commonly requested. Court filing fees. Expert’s fees and possibly barrister’s fees.
|Which process is right for you?||
You can speak for yourself and listen to the views of your spouse.
|You prefer the support of a lawyer but wish to avoid court||You prefer to avoid direct interaction with your spouse and hand responsibility over to lawyers.||Either you or your spouse are not capable or willing to communicate and negotiate directly.||
You wish a judge to decide what to do with your children and property.
|You don’t want to leave it to a judge to decide what’s best for you and your children.||
You don’t want to leave it to a judge to decide what’s best for you and your children.
Do not wish to make joint decisions, and prefer that an arbitrator do so. Can also be suitable where mediation or negotiations have not resolved all issues. Only financial matters – not children.
You believe your spouse will be violent or dishonest in a non-adversarial process.
Collaborative Family Law is about cooperation, not confrontation. It aims to meet the real needs and interests of both spouses – and avoid court. It fosters positive post-separation relationships – especially important when there are children.
Collaborative Family Law has many advantages including:
WHAT IS THE COLLABORATIVE LAW PROCESS?
Both spouses must instruct lawyers who are trained and accredited as Collaborative Practitioners. If your spouse does not wish to do so, we can still act for you in traditional negotiations or litigation.
A series of four-way meetings of spouses and lawyers is held. The exact number and length will vary.
A typical series of meetings may be as follows:
Generally, the location of each meeting alternates between the offices of the lawyers. Meetings normally take between one to two hours. Discussions and negotiations occur primarily at the four way meetings to encourage trust and avoid misunderstanding. There is contact between spouses and their respective lawyers in between meetings in order to obtain relevant information and plan for the next meeting, as well as checking settlement documents. As a result, meetings generally occur around two weeks apart.
Experts may be employed to help with particular steps. For example, parties may employ a neutral real estate valuer, or an accountant to calculate tax liabilities. A child counsellor or psychologist may help parents consider age appropriate residency arrangements – including speaking with the children to assist them in dealing with separation. Counsellors or psychologists known as divorce coaches can help spouses deal with the emotional effects of separation and teach effective communication techniques. This can assist spouses in negotiating agreements with unnecessary conflict and to establish post separation modes of communication in respect of children and other long term issues. Such experts should be trained in collaborative practices and should enter into the Collaborative Agreement.
Matthew Shepherd is a member of Collaborative Professionals NSW. He is a member of the Relationships Australia Collaborative Practice Group. He is also a founding member of the Northern Sydney Collaborative Practitioners Group. Matthew can explain the Collaborative process in more detail and help you decide if it is the best process for you to solve your family law issues.