Part 4 – Finalising the Property Settlement Deal
Once an agreement has been reached in your property settlement it is extremely important to make sure the agreement is recorded in a binding manner so that it has force and effect at Law.
Can’t my ex-spouse and I just sign a piece of paper or exchange emails recording our settlement – will the Court enforce that?
The short is answer is no. Whilst, normally, verbal and handwritten contracts are enforceable this does not apply when doing a property settlement arising from the breakdown of a marriage or de facto relationship.
There are only three ways in which a deal can be made binding and final. Each of these methods is briefly discussed below.
Order made by a Judge
This is the least attractive method and involves parties litigating in Court and the Judge eventually making an Order for property settlement. Such a method should be avoided if at all possible.
This is the most popular method used by parties to record their property settlement deal.
It requires an Order to be drafted and signed by the parties and this needs to be lodged in the Court with an Application seeking the approval of those Orders. The Court then considers the Orders and if they are of the view that the Orders are just and equitable, a sealed copy of the Orders will issue.
Until the Orders are approved and stamped by the Court then what you have written or signed is not binding. Whilst, a handwritten memo, exchange of emails or a verbal agreement may have some impact in future Court proceedings, such methods do not finally resolve your property settlement.
A Consent Order needs to be carefully drafted and filled out together with the Application for approval of the Orders. The documents are not straightforward and it’s important to get the Order right and in all cases you should seek the help of an Accredited Family Law Specialist to prepare and finalise your Property Settlement Orders.
Binding Financial Agreements
A Binding Financial Agreement can also be used by parties to finalise their property settlement deal. These Agreements can be done before marriage, during marriage but also after separation. It is effectively a Deed of Agreement that is done pursuant to Sections of the Family Law Act and the Agreement must strictly comply with those sections for it to be binding and enforceable.
In most cases at the end of a relationship, Lawyers choose to use Consent Orders but there can be some situations where a Binding Financial Agreement can and / or should be used.
A Binding Financial Agreement requires both parties to receive independent legal advice about the nature and effect of the Agreement and for Lawyers to sign-off Certificates and provide independent legal advice to each of the parties.
If the Agreement is done properly and in accordance with the Family Law Act then it will be binding upon both parties.
The above three methods are the only ways to finally resolve your property settlement in a binding and enforceable manner.