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Do you have a legally binding financial deal following relationship breakdown?

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By Belinda Spong, Senior Associate, MST Lawyers

Thankfully, statistically, approximately only 4% of separated couples end up facing off before a Judge in a final hearing before the Family Court.

Fortunately, most separated parties manage to resolve their financial issues by negotiation, either with the assistance of lawyers, a mediator or after direct discussions.

Once an “in principle agreement” has been reached by separated parties, those separated married or de facto parties need to ask “Do I have a legally binding deal?”

Usually, in the case of separated married couples, or in the case of de facto couples whose relationship has broken down since 1 March 2009, a legally binding settlement relating to property and spousal maintenance, can only be documented in one of two ways, either Consent Orders made by Family Court of Australia or in a Binding Financial Agreement.

What are Consent Orders?

Consent Orders are Court orders made by the Family Court, usually with no court appearance required.  The process is usually administrative.  The proposed orders signed by both parties are sent into the Court, considered by the Court and if deemed just and equitable by the Court, stamped and sent back to the parties (or their lawyers) once made.  Once the orders are stamped by the Court the deal contained in the orders becomes a binding one.

What is a Binding Financial Agreement?

A Binding Financial Agreement is essentially an out of Court contract, executed by parties after receiving extensive legal advice about the effect of the agreement on the rights of the parties to the agreement, and whether or not the agreement is to their advantage or otherwise.  It is mandatory for each party to retain a lawyer to take legal advice in relation to financial agreements.  

Which is right for me?

Each case will be different.  A range of matters need to be considered before deciding which legally binding document is right for your matter.  Those matters could include but are not limited to if you are divorced or if there are tax, or other financial consequences that might arise from your agreed financial deal.

What should go into my consent orders or financial agreement?

Again, each case will be different.   Usually the orders or agreement will contain the terms of your agreed settlement.

What if I don’t have Minutes of Consent orders or a financial agreement?

In most cases, unfortunately you won’t have a legally binding settlement.  One party could seek to change the agreed arrangement in the future.

What about Child Support?

Child Support, being cash payments for the benefit of children under 18 years, school fees and other child related expenses should usually be documented in a separate Child Support Agreement.

Should I seek legal advice in relation to documenting my financial settlement?

If you and your partner have reached agreement, you should give strong consideration to consulting with a lawyer about the best way to document your financial settlement.

You should strongly consider seeking legal advice before commencing, or during negotiations, about what is likely to be a just and equitable settlement for you.

For assistance with any legal matter arising from marriage or de facto relationship breakdown, please contact our Family Law team on +61 3 8540 0200 or email the author of the article Belinda Spong.