Reaching An Agreement Is Good NEws
You and your ex-partner may have an in-principle agreement, or are close to reaching an agreement, in relation to dividing the assets and liabilities of the relationship.
If you and your partner separate, keeping your relationship relatively amicable and reaching an agreement is one of the best things you can do. It will save you the time, stress and expense of going through a protracted legal dispute, and allow you to focus on moving on with your life.
An agreement can be reached with your partner in a variety of different ways. You may have gone through a formal mediation. You may have had a chat in a café. You may have written various emails to each other. Whatever you have done, you have now agreed in principle about how your assets and liabilities are to be divided.
The next step is to put your agreement in writing and make it legally binding.
But, There Is A Specific Way To Make It Legally Binding
An agreement is not legally binding until certain legal processes, such as the completion of consent orders, are followed. Until that is done, each person is free to change their mind even if they have agreed in principle.
Making your agreement legally binding will give you some legal protection if your partner changes their mind further down the track. Circumstances change. For example, people who are normally reasonable and amicable can become jealous and irrational once their ex-partner starts dating someone.
Making your agreement legally binding now, while you and your ex-partner still agree, can save you thousands of dollars in legal fees later on if your ex-partner decides to change their mind.
A legally binding agreement also gives you the security of knowing that if your ex-partner breaches it, you have recourse to enforce it in the Family Court of Western Australia.
Another very good and common reason to make an agreement legally binding is the fact that it can save you thousands of dollars in stamp duty. If your agreement includes provisions about transferring the family home or other properties into a party’s sole name, a legally binding agreement will ensure that the stamp duty payable on that transfer is minimal (it is usually $20).
Making your agreement legally binding allows you to move on with your life. It allows you to finalise all legal and other arrangements with your ex-partner, so you can start focusing on the future instead of getting bogged down in costly and emotional battles about the past.
Finalizing your agreement now also means that you are free to increase your wealth, increase your superannuation, and generally improve your financial situation, without having to worry about your ex-partner trying to reap the rewards of your hard work later on.
How To Legally Divide the Assets of the Relationship
To make your agreement about dividing the assets and liabilities of your relationship legally binding, you have two options.
You can either make an Application for Consent Orders, or enter into a Binding Financial Agreement.
Both options have the same legal effect, but have different requirements and processes.
The first option involves completing a Form 11 Application for Consent Orders, which is a Family Court document that sets out your assets, liabilities and other important information, and also a Minute of Consent Orders. A Minute is a legal document that sets out the orders you and your partner are asking the Family Court of Western Australia to make.
Once completed and signed by both parties, the Form 11 and Minute are filed at the Family Court of WA. The court normally takes about 4 weeks to process the application. If everything is in order, the court will make consent orders in terms of your application. Consent orders have the same legal effect and power as any other orders made by the court.
Once consent orders are made, both parties are bound to follow them, and they can only be varied or overturned in very limited circumstances.
The second option is entering into a Binding Financial Agreement (“BFA”). A BFA is essentially a contract between you and your partner. It does not get lodged at the Family Court. Because there is no court scrutiny or oversight of the BFA, there is a strict legal requirement that both parties to the BFA obtain independent legal advice.
Each party’s lawyer needs to sign statements confirming that they gave each party independent legal advice as to the effect of the BFA on their rights, and the advantages and disadvantages to the party of making the BFA at the time the advice was provided. These signed statements need to be attached to the back of the BFA.
Once both parties have obtained independent legal advice, they need to sign the BFA. One party then keeps the original document and the other party takes a copy. The BFA then becomes legally binding and enforceable.
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11 BenefitS of Getting Legal Advice Early
You may not have been through a separation before. You may not know where you stand, where to start or what to do. It is normal to feel overwhelmed by the situation. Speaking to an experienced family lawyer is often the first step to get clarity about your rights, your options, and what to do next.
Seeing a lawyer doesn’t mean you’re about to start World War III. Getting legal advice early can help you make informed decisions about your separation.
Getting legal advice can give you clarity about the law and the legal process, and improve your chances of avoiding a stressful and expensive Family Court battle.
If you and your partner are amicable, then an experienced family lawyer can advise you about your options for making an agreement.
If you and your partner are not so amicable, then an experienced family lawyer can advise you about the various options available to you for resolving the matter.
A family lawyer can also help prepare you if you do need to go to court as a last resort.
Sitting down with a lawyer for an initial meeting will give you important information such as:
- What a fair division of the assets of the relationship looks like, how much you should get, and how much your partner should get.
- How parenting arrangements for children under 18 are determined, and how much time you and your partner should be spending with your children.
- The process for making an agreement with your partner legally binding.
Sitting down with a lawyer can also help answer questions you might have, such as:
- How do I divide superannuation interests?
- Who gets to live in the family home after separation?
- If my child gets sick, who makes the decisions regarding medical care?
- What do I have to do if I want to take my child overseas?
- What are my options when it comes to child support?
- How much time should my kids be spending with me and my partner?
- Do we need to sell the family home or can one of us buy the other out?
- Who pays the mortgage?
- If my partner and I cannot reach an agreement, how do we resolve our family law issues?
If you reach an agreement with your ex-partner, a family lawyer can help you prepare that agreement and also make sure that it covers all the issues that you and your ex-partner may not have considered, such as:
- How the money in joint accounts is to be divided?
- If one person is buying the other person out, what happens if they cannot obtain finance approval?
- If there are personal loans and credit card debts, who is responsible for the repayments?
- How to effectively deal with business interests, such as organising a transfer of shares, organising the resignation by one person as director and employee, whether a family trust needs to be restructured, and whether a fair market value has been attributed to the business?
Once everything has been covered properly in the agreement, we can help you complete the legal paperwork and draft the necessary terms to make sure the agreement is both accurate and protects your interests.
We can then communicate with your former partner to have the documents finalised, or advise you on how to communicate effectively with your former partner yourself.
You Are In Experienced Hands
Jeff Hewitt is head of MKI Legal’s family law team. Jeff is a senior family lawyer with over 15 years’ experience.
Jeff practises exclusively in family law, and has extensive experience in property and financial matters, parenting and children’s matters, de factor property matters, family law matters affecting same sex couples, superannuation splitting, spousal maintenance, divorce, child support, child support agreements, binding financial agreements, and consent orders.
Jeff is an experienced negotiator who takes great pride in resolving disputes and keeping people out of court as much as possible.
In his spare time, Jeff enjoys spending time with his family, playing guitar, reading, meditation, and supporting his beloved footy team.
Jeff is a member of the Family Law Practitioners’ Association of Western Australia, the Law Society of Western Australia, and the Law Council of Australia (Family Law Section).
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