October 2019 | Shweta Kumar
In the family law context, two people may come to an agreement in relation to property or parenting matters without speaking to a lawyer. They may also think it is sufficient for them to write the agreement down on a piece of paper and sign it.
Does that make their agreement enforceable? The answer is “no”. This will be called a parenting plan or agreement and may be taken into account by a court, but it is not enforceable.
An agreement such as this should be formalised to make it enforceable. You can do that in one of two ways –
- Consent orders, to be made by a court; or
- Binding Financial Agreement.
What is the difference? It is mainly in the way they are drafted and the way they are enforced.
Consent orders describe a written agreement that is approved by a court. They are filed with the court and can be made without a court attendance and hearing. Nevertheless, they have the same effect as a court order made after a court hearing.
Consent orders can deal with any of the following issues:
1. Property settlement;
3. Splitting of superannuation; and
4. Spouse maintenance.
If you have reached agreement about property and parenting matters, consent orders can cover both (a financial agreement cannot cover parenting matters – more on this below).
Binding Financial Agreements
A financial agreement can be made before, during or after a marriage or de facto relationship. These agreements can cover:
- how property is to be divided upon the breakdown of a relationship; and
- financial support (maintenance) after the breakdown of a relationship.
For a financial agreement to be legally binding, a number of requirements need to be met. In summary, the agreement must:
- be in writing;
- specify the section of the Family Law Act under which it is made;
- be signed by all parties;
- be between parties to a marriage, a former marriage or who are contemplating marriage, or be between parties in a de facto relationship, contemplating a de facto relationship or whose de facto relationship has broken down;
- deal with property, financial resources and/or spousal maintenance of the parties or matters incidental or ancillary to these matters.
- not be with respect to property in a Financial Agreement which is in effect unless the parties have entered into a Termination Agreement in respect of the earlier Financial Agreement.
- each party must be provided with independent legal advice before signing the agreement about:
(a) the effect of the agreement on the rights of that party; and
(b) the advantages and disadvantages of making the agreement at the time that the advice was provided to that party;
- before or after the agreement is signed, each party must be provided with a signed statement by the legal practitioner stating the advice was given;
- a copy of the signed statement is to be given to the other party or to their legal practitioner; and
- the financial agreement must not have been terminated or set aside.
Reaching agreement in the family law context offers many advantages for parties:
- you make your own decisions;
- the financial and emotional costs of legal proceedings are greatly reduced;
- your continuing relationship as parents, if you have children, is likely to work better;
- you are able to move forward and make a new life for yourself; and
- you may improve communication with your former partner and be better able to resolve disputes in the future.
If you and your partner have come to an agreement regarding family law matters, please contact one of our experienced family law specialists who can assist you to formalise your agreement.