De Facto and same sex couples have, until now, been treated differently from married couples under the Family Law Act.
The Federal Parliament has recently passed the Civil Law and Justice Legislation Amendment Act 2018 which makes some significant amendments to the Family Law Act.
One of these important amendments relates to property settlements for de facto and unmarried same sex couples.
We’ve talked before about the perils of delaying your property settlement. Now, at least one of those issues has been resolved.
De facto and unmarried same sex couples applying for a property settlement out of time
Until this Act was passed, de facto and unmarried same sex couples were placed in an unequal position with married couples if they had not commenced court proceedings for a property settlement within the two-year time limit after the end of their relationship.
Married couples are required to commence proceedings within 12 months of their divorce becoming final. The situation has always been that married or de facto couples can consent to the court making orders out of time.
Previously the provisions of the Family Law Act allowed married couples who were out of time to consent using an Application for Consent Orders, which is a truncated process requiring that the parties to file forms with the Family Court without having to appear before a judge.
In contrast, unmarried same sex and de facto couples were required to make a formal application to the Federal Circuit Court and appear before a judge to obtain the leave of the court, even if they both consented to a property settlement.
This amendment will now allow unmarried same sex and de facto couples to use the Application for Consent Orders process in the same way as married couples.
What is the impact of the change?
This amendment will result in significant cost savings for couples who have not been able to finalise their property settlement within the two-year time limit but need to have a property settlement to finalise matters.
Often couples who live together, own property together. If there is no formal property settlement between them and one wants to buy out the other’s interest in the home, they will incur significant stamp duty unless they have court orders in place.
If leave is not granted by the court, then until now, their only recourse was to the state courts, which is a far more expensive process.
It would have been unusual for a judge not to grant leave where both parties consented, but parties still had to incur the cost of going before a judge or using a binding financial agreement which requires both parties to have lawyers and is a far more expensive process.
This amendment will instead allow couples the choice of process.
They can choose whether they engage lawyers, and they can use the administrative process provided by the Family Court to have consent orders approved by a Registrar.
An overdue amendment helping de facto and same sex couples stay out of court
This is an important and long overdue amendment to correct a flaw which we have lobbied to change.
Same sex and de facto couples have been recognised in the Family Law Act for many years now. This is an important step towards affording them the same rights as married couples if their relationships break down.
Importantly, it will also enable same sex and de facto couples who reach agreement using Collaborative Practice or Mediation to formally document their agreement, without having to use a Binding Financial Agreement if they want to avoid being exposed to the environment of the Federal Circuit Court or Family Court.
If parties choose to resolve matters amicably then it’s quite unfair to expose them to a court environment which is not only expensive, but also stressful and daunting.
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