Property Settlement Agreements: More than just a ‘piece of paper’ signed by your lawyer – Part 2
When you reach agreement about how your property will be distributed after separation it is essential to document the agreement in a formal way. Without a formal agreement, that is, either a consent order made by the Family Court of Australia or a financial agreement entered into under the Family Law Act, there is no certainty that your matter is truly at an end.
In this two part article you can find out:
Part 1 – the basics
- What is a consent order;
- What is a financial agreement
- Why do you need a financial agreement or consent order?
- Why is are these agreements more than just a ‘piece of paper’ signed by your lawyer?
Part 2 – the process
- What is the process?
Your can read Part 1 here
Part 2 – the process
What is the process?
Whilst the process will be tailored to each individual client, there are generally standard steps which must be taken to ensure that the agreement or consent order prepared is binding and protects both parties in the future. Read on to learn more about our comprehensive proves.
- Initial Appointment
At your initial appointment we will take your preliminary instructions about you matter. This will include working through with you the agreement you have reached with your spouse.
Even though you have reached an agreement it is important to note from the outset that as your lawyer we can only act for and advice one party to the agreement, even though everything is amicable about your agreement. We recommend that your spouse obtain independent legal advice at all times.
- Scope and provide detailed cost assessment with client agreement
After we have taken your preliminary instructions we are in a far better position to give you a detailed costs assessment. Where each financial agreement or consent order is tailored to your particular circumstances it is not possible to simply give an on the spot quote for the work to be done without knowing you and what you are trying to achieve. Your matter might be far more complicated or even far less complicated then you first imagined.
We will send you our detailed costs assessment with our client agreement. These documents will set out the work that we have assessed is necessary to assist you in your matter.
- Detailed instructions and disclosure
This is a key part of the process. It takes time. Ensuring that we have your instructions recorded properly and all relevant disclosure has been reviewed and exchange is vital to ensuring that any agreement you have reached with your spouse is binding. There are certain circumstances which can later lead a court to set aside an agreement which you need to be aware of.
A court can set aside a financial agreement or court order where there has been non-disclosure of a material matter – that is, if interests in property, whether assets, liabilities, or superannuation, income or other financial resources were not properly disclosed during the preparation of the agreement, a court may set the agreement aside.
The details of all interests in property, assets, liabilities, superannuation and the like are all recorded in detail in the financial agreement or consent order application. By signing the agreed documents you each declare that those are the interests in property held by you at that point in time.
It is for these reasons that it is imperative that all relevant documents be disclosed and exchanged with each other. If there are properties or share portfolios and investments, they should be valued. Bank statements showing current balances should be exchanged. It is risky to enter into a financial agreement or consent order simply on the basis that you both have a ‘pretty good idea’ of the financial details for each other.
If you are considering entering into a financial agreement or consent order you should allow plenty of time for discussions, disclosure, advice and signing. Rushing only increases the risk of one party feeling that they are signing under pressure and therefore the risk of having the agreement set aside.
- Drafting the agreement
A financial agreement or consent order application is not a document that should be whipped up with any haste. Clauses are included within the agreement to protect you from, for example, matters such as disclosure or the timing of the agreement which could cause the agreement or orders to be set aside. The agreement which you reach with your partner about how your property is to be divided on separation is set out in detail including who is to take what step, when and how.
- Advising about the agreement
Once the financial agreement or consent order application has been finalised and both parties agree to the terms, it is important that you receive independent legal advice regard the terms. For a financial agreement this is a mandatory requirement with the Family Law Act setting out that for an agreement to be binding “before signing the agreement, each spouse party was provided with independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement”.
Regardless of whether you are the spouse having the documents prepared or receiving the documents for review, it is imperative that you receive a detailed advice which covers:
- your obligations in entering into the agreement including your obligations for full disclosure;
- the current law as set out in the Family Law Act as it relates to property settlement matters;
- whether, having regard to the terms of the agreement and your likely entitlement without the agreement, whether it is in your interests to enter into the agreement.
The requirement that both parties receive independent legal advice when entering into a financial agreement is fundamentally important where you are contracting out of your right to have the court determine your property settlement matter. If you have entered into an agreement which is not favourable, then the Family Law Act requires that you receive proper advice about that.
It is important that both parties to the agreement receive the same level of advice. It is not a simple process of one party seeing a lawyer to “just sign off” on the advice. Both parties should make an assessment about the advice they are to receive. If one party does not receive sufficient advice, there is a risk that the agreement can be later set aside.
- Signing the agreement
Once the advice has been given, then , particularly for a financial agreement, the lawyers are in a position to sign off on the agreement. This usually done at the time the agreement is signed by the parties.
- Finalising the financial agreement or consent order application
After the financial agreement has been signed one party or their lawyer should retain the original and the other party should retain a copy. Either way, both parties to the agreement should have a copy of the agreement. The original agreement should be stored in a safe location.
The application for consent orders will be lodged with the Family Court of Australia. A Registrar of the Court will assess the proposed orders and if the Registrar is satisfied that the orders are appropriate having regard to the circumstances of the parties and the relevant law, the Registrar will make the orders.
As can be seen from the above there is a lot of work that goes into preparing a financial agreement or consent orders to ensure that the documents are binding and the risks of having the agreement you have reached set aside by the court in the future are low. It is also for these reasons that it is not possible for us to simply provide a quote over the telephone – there is a lot that we need to know about you and your circumstances before we can make that assessment for you.
To find out more about consent orders or financial agreements which document your property settlement agreement and how we can assist you with this process contact our office on (07) 3343 9522 or (07) 5446 1745 or through our contact us service here.