So you and your former partner have separated and reached an agreement in relation to a property settlement.
Is reaching an agreement between yourselves enough? Is there anything else you need to do to protect your assets?
Separation is not easy for anyone, and sometimes the mention of the word court can cause tension and angst, and may unnecessarily aggravate the situation further.
However, in the unfortunate event that you separate with your partner, any informal agreement reached between parties will not be legally binding on either party nor will it be legally enforceable in a court.
It is therefore very important to request that any agreement reached be legally formalised, otherwise either party can seek to have an entirely new arrangement made in the future.
There are only two methods of documenting a property that are legally binding. These are Consent Orders made by a court or a Binding Financial Agreement entered into between the parties.
What is the difference between Consent Orders and a Binding Financial Agreement?
• Consent Orders are court orders entered into by agreement between separated parties. They can be entered into in relation to the following issues:
o Property and financial settlement (including superannuation splits)
o Spousal maintenance
o Parenting matters
• A Consent Orders are filed with the Family Court, together with an Application for Consent Orders, which sets out relevant information the Court requires in order to assess whether the proposed orders are just and equitable (in the case of property orders) or in the best interests of the child or children (in relation to parenting orders). The Court will only make the proposed orders if so satisfied.
• Parties are generally not required to attend court.
• Parties are not required to use lawyers to enter into Consent Orders, although it is prudent to do.
• Once Consent Orders are made, they are enforceable.
• There are very limited grounds upon which Consent Orders can be appealed, set aside, varied or discharged.
• Parenting and financial arrangements can be formalised within the same set of orders.
Binding Financial Agreements
• There is no independent examination of a Binding Financial Agreement by a Court or any other body.
• It is not a requirement of a Binding Financial Agreement that the outcome it provides for be within the range of potential outcomes likely to be ordered by a Court.
• In order for a Financial Agreement to be legally binding, both parties must each have received their own independent legal advice in relation to a list of matters specified in the Family Law Act.
• A Binding Financial Agreement can only be made in relation to financial matters and cannot be used for parenting arrangements.
• A Binding Financial Agreement can be entered into before, during or after a marriage or de facto relationship.
• There are additional ground upon which Binding Financial Agreements may be set aside which do not apply to Consent Orders.
If you have reached an agreement with your former partner, it is recommended that you contact a lawyer to obtain legal advice in relation to what you’re entitled to before formalising any legal documents.
The team at Nicholes Family Lawyers would be pleased to discuss with you your individual circumstances and entitlements and the advantages and disadvantages of entering into either Consent Orders or a Binding Financial Agreement when finalising your property matters.