In our previous article an Family Law Consent Orders – An Introduction available here, we provided a brief introduction to the process of obtaining Family Law Consent Orders.
In this article we explain some common mistakes and complicating factors.
Does my Application for Consent Orders need to explain my entire Financial Situation?
Yes. One of the most common mistakes often made with an Application for Consent Orders is for the parties to only explain the financial or parental agreement reached and to stay silent on matters relating to their financial situation, either with the assumption that their assets or income will be concealed from the Court or their spouse, or assuming that information is not required.
Take the below example:
- James has separated from Mary. James and Mary each own half of the family home. James runs a business which is solely owned by James. James and Mary agree that Mary will take the house and James will take the business.
- James prepares consent orders that only provide for the transfer of the house to Mary. The Application for Consent Orders does not disclose the existence of the business, its value or the income it generates.
- James thinks this is okay because the business is not changing hands, only the house is.
- This is not an acceptable way to prepare and file an Application for Consent Orders and the Court is likely to reject the application on the basis that the parties have not fully disclosed their financial circumstances in the Application.
In the example above, James should prepare the Application for Consent Orders such that it discloses his 100% ownership of the business, as well as its value and the income it generates.
What about children in Consent Orders?
If there are children of the relationship under the age of 18 then you may wish to include clauses in the draft Consent Orders that deal with how parenting is to be shared between the parties. You do not have to and parties may not wish for orders to be made regarding those matters where they are able to manage shared parenting without conflict.
Where parties wish for the Consent Orders to deal with parenting matters then the Consent Orders will need to comply section 61D of the Family Law Act dealing with joint parenting, which provides broadly that parenting should be shared equally unless there is a good reason for one parenting to have more responsibility that the other. Such reasons might include the locations of the parents, work commitments and issues concerning abuse or violence.
One issue the parents must think very carefully about is whether the Consent Orders will permit one parent to travel with the children without the other. For example, for holidays or to visit family interstate. There is always a concern that one parent can take the children overseas and never return. Similar concerns can arise with interstate travel, but these are not as serious given that Consent Orders as to shared care will be enforced throughout Australia, regardless of state. Our general advice is that Consent Orders should not allow international travel without the express written consent of the non-travelling parent.
What about superannuation splitting in Consent Orders?
If the parties need to divide the superannuation of one party (usually the higher-earning party) amongst both spouses, the Consent Orders must provide for a ‘Superannuation Split’.
The two most important elements in relation to a Superannuation Split are:
- Obtaining a valuation of the superannuation interest; and
- Giving the Superannuation Fund (usually, its Trustee) ‘procedural fairness’ by advising the trustee of the proposed split.
Valuation of Superannuation Interest
A valuation of the superannuation interest must be requested and provided for in the proper form. There are additional documents that need to be completed when dealing with the valuation of a superannuation interest.
Secondly you must request that the Superannuation Fund complete and return the part of the form valuing the type of interest you have. The most common form of superannuation interest is an “accumulation interest” (i.e. you contribute to it over time) in the “growth phase” (you are still making compulsory contributions pre-retirement). If you have this form of superannuation interest you will need your Superannuation Fund to complete some additional information for the valuation.
Procedural Fairness to Superannuation Trustee
When you ask for a Superannuation Split you are asking the Court to make a third-party (the Superannuation Fund) do something. The Court will therefore require you to first inform the Superannuation Fund of the proposed Superannuation Split and obtain their consent.
Provided you are seeking a simple percentage split (for example, 60/40, 70/30 etc.) of a Superannuation Fund, there should be no objection from the Superannuation Fund.
Generally the Superannuation Fund will wish to ensure they have enough time to implement the split and that they are correctly named in the Consent Orders by their strict legal name.
Don’t forget to deal with Family Trusts and Family Companies!
If you have any family trusts or family companies then your draft Consent Orders will need to set out what changes the parties have agreed to in respect to those matters.
Importantly, parties need to remember that just because their Consent Orders may mention the changes being made there are further documents that need to be executed to formally make the changes.
For example if a parties is to retire as a trustee and/or beneficiary of a family trust you will need to prepare a Deed of Resignation as Trustee and/or Beneficiary. You should ensure that those documents are properly signed and executed and then stored safely. If a party is a director or shareholder of a family company then appropriate directors resignations and share transfer forms need to be prepared and executed and the changes made must be notified to ASIC and the company register updated.
Can you prepare my Application and draft Consent Orders?
Absolutely. We have extensive experience in preparing and applying for Consent Orders. If you would like some assistance in this process please do not hesitate to contact us.