Relationship breakdown usually means unbundling financial affairs. For many couples, that means deciding who will retain the relationship home.
If there is a loan on that property, the ‘transferring’ spouse will inevitably require the ‘retaining’ spouse to secure their release from liability in respect of any housing loan facility in respect of that home, usually secured by Mortgage registered by the lender over its title. Banks assisting the retaining spouse with this refinance will often require to see this arrangement (transfer of the title of the relationship home, in exchange for a payment of settlement money, and a release from indebtedness) recorded formally, in an Order or Financial Agreement. Each of these documents can be made by consent between the separated couple. That way, the lender can ensure that the outcome is ‘final’, and binding.
To document outcomes formally is prudent because they will often support an application for an exemption from payment of stamp duty on the transfer of the title of the home (exemptions can exist where a transfer is occurring, under a formal, legal document, as a result of family breakdown) – that can mean a saving of many thousands of dollars (and which will usually more than justify the cost of having the settlement legally documented). There are differences between Orders and Financial Agreements, and your family lawyer will be able to recommend which suits your circumstances the best. Note that any Order or Financial Agreement will likely need to address all property that the spouses own, whether jointly, or separately (including superannuation), so that a ‘clean break’ in the financial connectedness between the spouses is achieved. Note also that there may be other claims arising from the relationship breakdown, and your family lawyer will therefore talk to you about whether the settlement documents should also address those things.
The ultimate cost of documenting your outcome will therefore turn on a few factors – your unique situation and its complexity, the financial claims which are at large and which need to be addressed, and the specific provisions of your particular settlement documents.
