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It is always best for everyone when a separated couple can agree privately and amicably to divide their assets. So why go to a lawyer when you have agreement with your ex spouse?

With the current cost of living pressures, investing in a legal settlement may seem like a luxury spend but we will take you through why it’s a great investment for your future to see a lawyer even though you have reached an agreement with your ex spouse.

How do you know if it’s fair?

It’s great you’ve reached agreement but how do you know if it’s fair?

What you and your ex spouse think is fair, may not be considered fair under the current case law and under the Family Law Act (Cth). There are many factors that impact the fairness of an agreement and an hour appointment with an expert family lawyer can enlighten you about those things.

A 50/50 split may be fair in comes cases but no two situations are the same. Your family lawyer will be able to take you through how different factors impact the percentage division. Financial contributions such as income earned and assets brought in to the relationship may be offset against considerations such as poor health and low income earning capacity. Under our current laws, the aim is for spouses to be in an equal position to re-build their life after separation which can at times mean an unequal division of the assets.

Second bite of the cherry

Legally formalising your agreement with your ex spouse will mean that neither of you can come back for more at a later date. That is, there is no second bite of the cherry once the agreement has been legal formalised and only in exceptional circumstances can a legally binding property settlement be overturned. So once it’s done, it’s done for good and you have certainty in moving forward with your life.

You might re-partner

After separation, life doesn’t stand still. If you re-partner and decide to live together, a legally binding property settlement with your ex spouse will give you a clear path ahead to re-build your life together with your new spouse, without fear of some further claim against your property.

What if you die?

If you haven’t legally formalised your property settlement with your ex-spouse and you die, then they may have a claim on your estate. Even though there was an informal private property settlement, if it wasn’t fair then, by the time you die, it could be even less fair.

Therefore, you might have done a Will but if you didn’t have a legally formalised property settlement with your ex spouse, your estate may not end up with the beneficiaries you intended it to go to.

How do you legally record a property settlement?

There are two (2) ways to legally formalise a property settlement. Both will cost about the same in legal fees and each have their benefits.

Consent Orders with the Federal Circuit and Family Court of Australia

An application can be filed in the Federal Circuit and Family Court of Australia asking the Court to approve your agreement. There are two documents to be prepared, signed and filed for this. An Application for Consent Orders and a Proposed Minute of Order. A Registrar of the Court considers the Application to ensure it complies with the Family Law Rules and they also consider the Proposed Order to ensure it is fair under the Family Law Act (Cth). Only if the proposed order is fair in all the circumstances under the Family Law Act (Cth), can the Registrar approve the proposed order.

The whole process, from taking instructions to the Order being made can take some months and depends on how quickly each party and their solicitors contribute to the drafting of the documents. On filing with the Court, a Registrar can take between 2 and 6 weeks to consider and approve the Order. In exceptional circumstances, it may be done faster.

Binding Financial Agreement

The Family Law Act (Cth) also allows property settlements by way of a Binding Financial Agreement or BFA.

A BFA can be a faster way to record your property settlement but it is not approved by the Court. In fact, a BFA specifically excludes the jurisdiction of the Court. That is, by signing a BFA, parties are saying that they don’t care about the fairness considerations of the Family Law Act (Cth) and the case law. They are saying that they have considered their own circumstances and they want to legally record their agreement, whether it is fair under the law or not.

BFA’s are often used when there is some element of unfairness and it’s likely the Court won’t approve it. But an unfair legally binding property settlement is better than no legally binding settlement at all. For a BFA both parties need to have lawyers to assist in the negotiation and sign off of the same.

At Clarke Hemmerling Lawyers we can provide practical and clear advice about the settlement options based on your particular circumstances. Yes it will cost you some money, but it may save you a lot more in the long run.

This blog post does not constitute legal advice and should not be relied upon as such. It is a general commentary on matters that may be of interest to you. Formal legal or other professional advice should be sought before acting or relying on any matter arising from this communication.