We’ve separated and reached an agreement that I keep everything, now what?
Believe it or not, this scenario is more common than you would think. We often meet with clients who tell us they have reached an agreement with their ex that they will keep everything of value, and they simply want this documented.
As straight forward as it sounds, this is not always doable. Most commonly, when separated parties reach an agreement, this is documented and formalised, by way of a Consent Order and an accompanying Application, which is sent to the Federal Circuit and Family Court of Australia. The Application and Orders must be approved and made by the Court for the agreement to be legally binding.
After the documents are filed with the Court, they are considered by a Registrar. A significant area of consideration is deciding whether or not the agreement is ‘just and equitable’. In deciding this, the Registrar will firstly identify the assets and liabilities and consider the contributions made by each party and what their future needs are, as detailed within the Application. They will then decide whether having considered those things, the agreement is just and equitable.
If one party is receiving a significant percentage of the property pool without explanation, the Court may refuse to make the Orders on the basis that the agreement is not just and equitable. However, there are some circumstances where one party receiving the majority of the property pool would be considered just and equitable – but this will depend on a number of factors.
Alternatively, if the agreement is outside of what a Court would consider to be just and equitable, the agreement could instead be formalised and documented by way of a Binding Financial Agreement. Unlike Consent Orders, there is no requirement for a Binding Financial Agreement to be just and equitable.
In this situation each party must obtain legal advice about the advantages and disadvantages of the agreement and Solicitors must sign a Statement confirming this advice has been given. There are several circumstances that may warrant a Binding Financial Agreement being set aside by the Court. Because of this, Binding Financial Agreements are often more costly than a Consent Order.
If you have reached an agreement and are unsure how it should be documented, contact our office to arrange an appointment to obtain advice on what to do next.