Risks of not Documenting your Property Settlement

What are the risks of not documenting your property settlement?

Are there any?

The short answer is yes.

If you are thinking of not documenting your property settlement in a legally binding and recognised way then there are many risks you need to be aware of.

You’ve managed to reach agreement on how you’re going to divide your property, you’re happy with it, the other party is happy and you don’t want to rock the boat, you don’t want to upset your former spouse, you want to keep it amicable.

That’s a common situation.

But things change.

People regret decisions. People hear from others that they ‘should have got more’ or are entitled to more. Financial circumstances change and people sometimes then feel they need access to more money or property. People re-partner and new partners, relatives, friends and neighbours all often have something to say about your property settlement and may try to influence what is done.



Any one of these things could have you facing a situation where your partner decides later to change your “informal” property settlement agreement.

People on the friendliest of terms will still look after themselves first and if they think their financial circumstances need it and they know the property settlement agreement reached is not legally binding, then they may want more later.

The best time to get your former partner to agree to make the property settlement you have reached final, binding and enforceable, is:

  • when you both have just decided on how the property will be divided;
  • when you are still on reasonable terms.

If you both are prepared to make the property settlement you have agreed to final, then it should be easy to get your agreement into either Consent Orders or a Binding Financial Agreement.

If your former spouse doesn’t want to have Consent Orders or a Binding Financial Agreement, then you may want to ask why not – are they hiding something or hedging their bets to keep options open for the future.

If you reach agreement but want to keep things informal (without Consent Orders or a Binding Financial Agreement), you can be taking a big risk.

If you agree, why not put it in writing and get it legally enforceable, so there will never be any misunderstanding or attempt by one person to change things if their circumstances change.

It would be nice to be able to rely on your former spouse’s word, but you are no longer together and the only thing you can have complete trust in, in relation to something as serious as your property and financial future, is a Court Order.

You must also remember that if your property settlement agreement is not legally documented you will not be able to:

  • avoid paying stamp duty on the transfer of a house, land or unit; or
  • use Capital Gains Tax Rollover relief provisions.


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