Formalising your Property Matter: How to do it and is it necessary?

When you separate, you will often hear stories from family, friends or even friends of friends of their experience going through a separation or divorce. These stories are sometimes the ‘worst case’ scenario, involving lengthy litigation and long paths to resolution. However, this is not the only way. Where you have reached an agreement, you are not always required to enter the Court system.

Whilst some matters require the Court’s intervention, there are many matters which can resolve by direct negotiation, through correspondence via lawyers or at private mediation. Once you and your former partner have reached an agreement as to how to divide your assets, liabilities and superannuation, you will likely want to formalise that agreement as there are benefits in doing so. To do so, you have a number of options.

The most common approach is the ‘consent orders’ process. You and your former partner ( or your lawyers) complete an Application for Consent Orders (which provides the Court with some information about what you each own and the proposed property settlement), along with the Orders you seek that the Court makes to ‘effect’ your property settlement. The Court then sets a date to review the documents and if approved, will grant the Orders that you are seeking. If the Court does not consider that the outcome is ‘just and equitable’, the Court may decline to make the Orders you seek and request you to provide the Court with further information.

Another option is to enter into a Binding Financial Agreement. This is a private agreement which requires you and your former partner to each obtain independent legal advice from a lawyer. The Court does not review the agreement reached between you and you remain outside of the Court system. Due to the requirements of a Binding Financial Agreement, this option can be more expensive however it can be preferable in certain circumstances, and more private.

In some instances, you and your former partner may decide that you are willing to part ways without formalising your agreement. Any agreement reached should at least be communicated between you and your former partner in writing. This option may only be suitable in limited circumstances.

It is important to seek legal advice from a specialist family lawyer as to the most appropriate way to formalise the agreement reached between you. For example, there may be stamp duty exemptions applicable if you transfer property pursuant to a Court Order or a Binding Financial Agreement. If your property settlement involves a superannuation split, there are extra steps that you must take to ensure the Trustee of your super fund has been accorded ‘procedural fairness’ so they can (and will)  implement the superannuation agreement you have reached.

Robinson + McGuinness can provide advice on whether the agreement you have reached is a ‘just and equitable’ outcome, as well as the best way to formalise the agreement based on your individual circumstances. Contact us to make an appointment on (02) 6225 7040 or by email on info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers.

Author: Anika Buckley

Separation essentials: Nine things to know after separation

9 THINGS TO KNOW AFTER SEPARATION

1. Timeframes are important! If you have been in a de facto relationship, you have two years from the date of separation to formalise your property settlement. If you are married, you have 12 months from the date of divorce to formalise your property settlement. You must be separated for 12 months before applying for divorce.

2. Divorce proceedings are separate to Court proceedings relating to parenting and property matters. The divorce application process is generally a relatively quick and simple process.

3. Delay is risky. It is advisable to formalise a property settlement as soon as reasonably practicable after separation, to ensure that there is not any significant change in the financial circumstances of parties from that which existed during the relationship.

There are also risks associated with delay in parenting matters. For example, if there are unsatisfactory parenting arrangements in place, it can become increasingly difficult to change any “status quo” which may come about, the longer that those arrangements are in place.

4. Transparency is required regarding your respective finances while negotiating a property settlement. All parties are required to provide full and frank disclosure of their financial circumstances, including income, property in their name or possession, and any financial resource available to them. If a party has failed to provide disclosure, there could be scope for the other party to have any Binding Financial Agreement or Court Orders set aside, on the basis of that non-disclosure.

5. You are entitled to obtain independent legal advice, and should do so. Each party ought to obtain legal advice from different lawyers. Your solicitor’s job is to give objective and realistic advice to assist you in resolving any dispute. Anything that you discuss with your solicitor is confidential.

6. Children should not be involved in discussions regarding property or parenting arrangements. It is important for children to be protected from conflict, and not placed in a position where they are exposed to any unkind comments made about a parent or other family member.

7. There are a range of alternative dispute resolution options available to parties, including collaborative law, mediations, arbitration. These alternative options of dispute resolution are aimed at reducing the conflict, delay, and cost which can be associated with more traditional methods of dispute resolution, and of course to avoid Court where possible.

8. Most matters resolve without litigating. Those who have recently gone through a separation are sometimes understandably concerned about the risk of being involved in stressful and costly litigation. The vast majority of people reach agreement without being involved in Court proceedings, and only approximately 5% of matters before the Court progress all the way to a final hearing. Litigation is a last resort, and should be treated as such, unless there are safety issues or in matters of urgency.

9. You, and your loved ones, are entitled to feel safe and if you have any concerns about your safety you should urgently obtain advice, including in relation to the possibility of obtaining a protection order to cease or limit contact with another party.

To obtain specialist family law advice in relation to your separation, contact Robinson + McGuinness to arrange an initial appointment. Contact our office on (02) 6225 7040 or by email on info@rmfamilylaw.com.au or get started now online to make an appointment with one of our experienced family lawyers.

Author: Margot McCabe

International Prenuptial Agreements in Australia

A prenuptial agreement or Binding Financial Agreement (BFA) as they are known in Australia, is a document that sets out how your assets and liabilities will be divided in the event of a separation. A BFA can be entered into before, during or after a relationship.

Prenuptial agreements are common in many different countries and are tailored to the law of each country. If you entered into a prenuptial agreement overseas, you should be aware that it will not automatically be recognised if you are separating in Australia.

For a financial agreement to be binding in Australia, it must comply with the requirements of the Family Law Act 1975.

Part VIIA of the Family Law Act sets out the requirements of a BFA, including:

1. That the agreement be in writing and signed by both parties;

2. That each party obtain independent legal advice prior to signing the agreement;

3. That each party is provided with a signed statement by the legal practitioner who provided them with independent legal advice; and

4. That the signed statement is provided to the other party under the agreement.

Even if an agreement is binding in the country of origin, it may not be enforceable in Australia if it does not comply with the above requirements. In absence of an agreement, the division of property between married couples is governed by section 79 of the Family Law Act 1975, which takes into account the contributions and future needs of each party, among other things. You may wish to inform your lawyer or the Court that a prenuptial agreement exists, but the Court is not bound to follow the terms of the agreement. The Court may, however, take the agreement into account in determining whether orders are just and equitable.

If you would like the terms of your international agreement to apply in Australia, you should enter into a BFA that complies with Australian law. If you have assets overseas, or are a citizen of another country, it is also important to consider the laws of the respective countries to determine how those assets may be dealt with if you separate with your partner. You should obtain specialist family law advice to help you understand how the law applies to your situation.

If you would like to discuss your matter and how we can assist you, please contact us today on (02) 6225 7040 by email info@rmfamilylaw.com.au or get started now online.

Author: Amy Davis

Why should I formalise my Property Settlement?

The Family Law Act 1975 (the Act) provides two enforceable ways of formalising a property agreement after the breakdown of a marriage or de-facto relationship: Consent Orders (CO) or a Binding Financial Agreement (BFA). While it may seem easier or cheaper to simply divide what you have with your former partner, and go your separate ways, there are many benefits in formalising the agreement, and equally, many risks in not doing so.

Why should I?

Deciding on how to formalise your property settlement will depend on a range of factors: the complexity of your agreement, what is within the property pool, and what your pathway forward may look like.

Consent Orders are prepared with or without lawyers involved and are filed with the Court for a nominal filing fee. They can generally take from six-eight weeks to be reviewed by the Court. Once reviewed, the Court may approve them and issue you with sealed Consent Orders, or they may write asking for matters to be explained or parts of the proposed Consent Orders to be amended. The agreement the parties come to must fall within a permissible range of what is a just and equitable division of the pool as set out in the Act. Once issued, they are enforceable and binding upon the parties. They can only be set aside in very limited circumstances.

Binding Financial Agreements must be prepared where each party has had the benefit of prior independent legal advice and is an agreement that effectively seeks to deviate from the rights and protections under the Act. It is not reviewed by the Court like Consent Orders are, and it can be an agreement that does not fall within what a just and equitable division of the pool may look like. It must be precisely prepared, otherwise, it can be set aside for failure to comply with the strict requirements of the Act. 

Both sets of documents, once completed and issued in final, have the benefit of:

1. Bringing your property dispute to a close with certainty. Unless a very limited set of circumstances apply, the agreement is final and prevents either party from seeking to make further claims against the other.

2. It is enforceable, meaning either party can seek the other to comply with the agreement, even if they decide they no longer want to, by way of Court enforcement mechanisms.

3. It can offer tax benefits, such as the transfer of some assets such as property and motor vehicles under a stamp duty exemption.

What if I don’t

While it is ultimately your decision whether you choose to formalise your agreement or not, you need to be aware of the risks of not formalising, including:

• If your ex-partner decides not to comply with any of the terms of your agreement, you have little in the way of “enforcing” the agreement be complied with.

• You cannot split superannuation entitlements.

• You expose yourself to the risk of your ex-partner coming back for “more”, particularly if you have re-established yourself, such as buying further property, pooling assets and resources with a new partner, or paying down debts / paying a higher rate of superannuation. 

• They may be entitled to make a claim upon your estate and may continue to be considered a beneficiary.

If you intend to proceed with an informal property settlement, you should seek accounting, tax and estate law advice to properly inform yourself of the risks that this may expose you to. While it may seem like a convenient and cheap option, informal property settlements are likely to cause you more trouble down the track. To understand what may apply in your particular circumstances, contact our office at (02) 6225 7040 or info@rmfamilylaw.com.au.