Formalising Your Property Agreement
Have you reached agreement about property with your former spouse? What now?
It is very important to ensure that any agreement reached be formalised into a legal document. This will help to protect your assets and prevent your former partner from seeking to have an entirely new arrangement made (or from trying to make a claim against any of your assets) in the future.
There are only two ways of formalising your family law property agreement that ensures your agreement is legally binding and recognised by law.
You can either formalise your agreement by Consent Orders made by the Family Court, or by a Financial Agreement entered into between you and your partner.
If you document your property settlement in any other way, such as by signing a letter or statutory declaration, your agreement will not be considered legally binding, and you may not be able to enforce the terms of the agreement.
What is the difference between Consent Orders and a Financial Agreement?
- A Consent Order is a written agreement that documents an agreed division of matrimonial assets for a marriage or de facto relationship. The proposed Consent Orders, together with an Application for Consent Orders (that sets out your respective assets and liabilities) are sent to the Family Court where a Registrar will review the terms of the agreement.
- A Consent Order will finalise your property matter with your former partner.
- Consent orders can deal with such things as the transfer or sale of real property, payment of money to a spouse and splitting of superannuation.
- Consent Orders can also be used to document your parenting agreement at the same time as your property/financial matters.
- You are not required to attend Court.
- The Consent Orders sought must be within the range of entitlements the Court would deem as ‘just and equitable’.
- You are not required to use lawyers to enter into Consent Orders, although it is prudent to do so.
- You can enter into a financial agreement before, during or after your marriage or de facto relationship.
- Financial agreements can be used to deal with financial settlements, including superannuation entitlements and financial support/maintenance.
- The only way you or your former spouse can contract out of future liability for spousal maintenance is to enter into a Financial Agreement.
- Parenting arrangements cannot be documented in a financial agreement.
- For your financial agreement to be legally binding, you and your former/current spouse must have both signed the agreement and received independent legal advice before signing the agreement. Your lawyers must sign a statement confirming that they gave you advice about the effect of the agreement on your rights, and about the advantages and disadvantages, at the time the advice was give, of making the agreement.
- There is no ‘just and equitable’ principle applied to financial agreements.
- There are very strict legislative requirements that must be adhered to in order for the Agreement to be binding and enforceable.
- There is a risk your agreement may be set aside if the financial agreement is not drafted correctly, or the strict legislative requirements are not met.
If you have reached an agreement with your former partner, we recommend that you contact one of our experienced family law solicitors to obtain legal advice in relation to what your entitlements are before formalising any legal documents.
To find out more about the advantages and disadvantages of entering into Consent Orders or a Financial Agreement, contact our team at Australian Family Lawyers.
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