What is a Family Law Separation Agreement

A family law separation agreement, also known as a binding financial agreement (BFA), is a legally enforceable document that outlines the terms of financial separation between partners when a relationship reaches its endpoint. This agreement is crucial for both married and de facto couples seeking to resolve property and financial matters without court intervention.

The primary purpose of a separation agreement is to provide clarity and legal certainty regarding the division of assets, debts, and financial responsibilities. It covers various aspects, including

• property division
• superannuation
• spousal maintenance
• sometimes arrangements for children.

Key benefits of a separation agreement

Cost-effectiveness compared to litigation

Greater control over the outcome

Reduced emotional stress

Faster resolution of financial matters

To be legally binding, the agreement must meet specific criteria

• It must be in writing and signed by both parties
• Both parties must receive independent legal advice
• Full financial disclosure is required
• It must be entered into voluntarily, without duress or undue influence

It’s important to note that while separation agreements offer flexibility, they must still be fair and reasonable to be upheld by a court if challenged.

Seeking professional legal advice is crucial when considering a separation agreement. An experienced family lawyer can ensure the agreement is comprehensive, legally sound, and protects your interests, providing peace of mind during such difficult times.

Understanding Separation Agreements and Consent Orders

Consent Orders are legally binding agreements between parties, typically used in family law matters, that have been approved by the court. These orders formalize arrangements agreed upon by separating couples regarding issues such as property division, financial matters, and parenting responsibilities. Once approved by the court, Consent Orders carry the same legal weight as orders made by a judge after a court hearing.

They provide a clear, enforceable framework for post-separation arrangements without the need for a formal court trial. Parties can draft Consent Orders themselves or with legal assistance, but they must be reviewed and approved by the court to ensure they are just and equitable. This process offers a more amicable and cost-effective alternative to contested court proceedings while still providing legal protection and certainty.

Formalizing Arrangements: Financial Agreements vs. Consent Orders

As mentioned, it is possible to formalize your arrangements under the Family Law Act by entering into a financial agreement or the other alternative available to you is by seeking consent orders if you can come to an agreement on how your property and finances should be distributed between you and your spouse.

Resolving Property Disputes: Filing Financial Orders and Seeking Legal Advice

If you and your spouse are unable to reach an agreement on the partition of your property, you can file a financial order with the Federal Circuit and Family Court of Australia (FCFCA). It is in your best interests to seek legal counsel in order to ensure that you fully understand your legal rights and obligations before signing any agreements or court orders.

The Consent Orders Process: A Streamlined Alternative to Court Proceedings

Parties should generally agree to Consent Orders that will be filed with the Family Law Courts rather than going through a formal court process. This entails the creation of two documents that will be submitted to the Family Court. The documents will be reviewed by a Registrar of the Court after they have been filed. The parties are not required to appear in court. Assuming that the Registrar finds the agreement to be reasonable and suitable in light of the unique circumstances of the relationship, the Registrar will issue enforceable Court Orders in accordance with the provisions of the agreement.

Consent Orders are preferred in the vast majority of instances. They are often less expensive and less difficult to prepare. It is critical that parties get legal advice on the appropriate course of action to take in their specific situation.

Key Factors

• Preferred alternative to formal court proceedings
• Involves filing two documents with the Family Court
• Reviewed by Court Registrar; no court appearance required
• If deemed reasonable, Registrar issues enforceable Court Orders

Separation Agreements: Choosing Between Consent Orders and Binding Financial Agreements

Court Approval of Consent Orders: Ensuring Fairness and Equity

In order for a court to utilize its discretion to issue consent orders, it must be convinced that doing so is reasonable and equitable. Once this is accomplished, the court must be convinced that the proposed orders are reasonable and equitable. A court’s decision of what is “just and equitable” means that the orders must be fair to all parties and fall within the range of conceivable outcomes that may have resulted had a judicial judgment been made.

Binding Financial Agreements: Flexibility Beyond Court Equity Standards

Given the Binding Financial Agreements are not sanctioned by a court, there is no legal obligation that they be just and equitable in accordance with the criteria employed by the Family Court in making its determination. The parties may come to an agreement that the provisions of the agreement represent a suitable conclusion in light of the current situation. Parties may agree on the terms of a contract for reasons other than fairness. For example, parties may agree on the terms of an agreement because of practical factors. As a result, parties are able to engage in agreements that are manifestly unjust if they so want.

The Objective of a Separation Agreement

The agreement serves as a crucial legal instrument in the process of relationship dissolution, whether for married or de facto couples. Its primary objective is to formalize the property settlement between the separating parties, providing a clear and legally binding framework for the division of assets and liabilities accumulated during the relationship.

This agreement aims to offer both parties legal clarity and certainty regarding their financial positions post-separation.

By detailing the allocation of property, investments, debts, and other financial matters, it helps prevent future disputes and misunderstandings. Furthermore, a well-crafted separation agreement can streamline the separation process, potentially reducing emotional stress and legal costs associated with protracted negotiations or court proceedings.

Ultimately, it allows both parties to move forward with their lives, having a transparent understanding of their financial standings and responsibilities following the end of their relationship.

What are the Advantages of Entering into a Separation Agreement with your Spouse

Separation agreements will save you both a great deal of time, money and worry by doing the following:

• It may be possible to avoid paying stamp duty and capital gains tax on the transfer of property if the relationship is kept friendly and out of court;
• and it may be possible to avoid future disagreements (less stressful, greater certainty).

When Does a Separation Agreement Become Legally Enforceable and Binding on the Parties

All sorts of Financial Agreements must adhere to stringent legal criteria stated in the Family Law Act, which include the following:

• Those agreements must be in writing and signed by all of the persons involved.
• Prior to executing the Financial Agreement, each party must have obtained independent legal counsel from a qualified family lawyer. At Australia Lawyers we can help.
• The legal advice supplied must have been provided by a family lawyer licensed to practice in the Australian jurisdiction.
• The Financial Agreement must have been signed freely by each individual (free from coercion, duress, or undue influence).
• The Financial Agreement should include a thorough disclosure of each party’s financial situation.

Do I need to consult with a Family Lawyer

This is a must, please do this first. Prior to executing separation agreements, each party must get separate legal counsel from a qualified family lawyer.

If you do not seek legal counsel before entering into a separation agreement, the arrangement will be unenforceable.

Keep in mind that you cannot just “visit” a lawyer or have the lawyer witness you signing an agreement; instead, you must acquire a “Certificate of Advice” from the family lawyer.

What is a Certificate of Advice, and How Does it Work

Your family lawyer will issue you a ‘Certificate of Advice’ after reviewing your separation agreement and providing you with advice. You will sign this document to confirm that you have received the advice. You must then provide a copy of this certificate to the other party, and the other party must do the same for you. This condition of Section 90G of the Family Law Act 1975 cannot be met until all parties have received a copy of the document.

Can I Draft the Separation Agreement

It is usually advised that a family lawyer with specialized knowledge prepare the agreement. Remember, it has massive ramifications, and having it struck out by the Court because of an error or because of its unfair nature is something you should avoid.

Furthermore, it is best to have a lawyer create the agreement since it will guarantee that the terms are stated in a clear and straightforward way, which will make it easier for the lawyers representing both parties to examine and offer a Certificate of Advice on the agreement.

It goes without saying, that it is best to stay away from online separation agreement templates since they seldom fulfill legal standards and are extremely likely to be invalidated by a Court if they are questioned.

Is it Possible for a Couple in a De Facto Relationship to Use Separation Agreements

Separation agreements are not exclusive to married couples; they can also be utilized by individuals in de facto relationships, including same-sex partnerships.

These agreements, sometimes referred to as “de facto separation agreements,” serve the same purpose as those used in marital dissolutions. They provide a legally binding framework for asset division, financial arrangements, and, if applicable, parenting matters when a de facto relationship ends.

The Family Law Act 1975 recognizes de facto relationships, granting them similar rights and protections as married couples in terms of property settlement and financial matters.

Consequently, de facto couples can benefit from the same legal mechanisms, including separation agreements, to formalize their arrangements upon relationship breakdown. This inclusive approach ensures that all types of committed relationships have access to fair and equitable separation processes.

Is it Possible for a Couple to do a Separation Agreement after their Divorce is Finalized

Even after a divorce is finalized, couples can still enter into separation agreements, commonly known as a ‘Post Divorce Property Settlement Agreement’. This agreement falls under the category of binding financial agreements (BFAs) and serves to formalize the division of assets and financial arrangements that may not have been addressed during the divorce proceedings.

However, it’s crucial to be aware of the time constraints associated with such agreements. Under Australian family law, couples must finalize their property settlement within 12 months of the date their divorce becomes absolute.

This time limit is designed to encourage prompt resolution of financial matters and provide certainty for both parties. Failing to adhere to this deadline may result in complications or the need for special permission from the court to proceed with a property settlement.

Therefore, it’s advisable for divorced couples to act swiftly if they wish to create a post-divorce separation agreement to ensure their rights are protected and their financial matters are conclusively resolved.

Do I have to go to Court in order to have my Separation Agreement Finalised

One of the advantages of adopting separation agreements is that you do not have to go through the court system.

When it comes to Prenuptial Agreements, What is the Difference Between Them

Separation agreements are a binding financial agreement (BFA) that is put into AFTER two persons have separated.

A prenuptial agreement (prenup) is a binding financial arrangement (BFA) that is entered into BEFORE two persons split from one another.

The Family Law Act permits persons who are going to marry, who are currently married, or who are separated to enter into a Financial Agreement. Financial Agreements are classified into three categories:

• Before marriage agreements, when spouses wish to quarantine previously acquired assets from the consequences of separation, or when one spouse enters a marriage with interests in family business structures and there is a desire to protect those business assets from becoming embroiled in a legal battle.
• When it comes to financial agreements, they can be employed in a variety of situations. It may be an agreement reached while the parties are still in a happy relationship, and it will have the same impact as a pre-nuptial agreement, except that it will be entered into after the marriage.
• An asset protection measure may be employed when one or more spouses are experiencing marital difficulties and it is necessary to reorganize their financial affairs in order to offer security for one or more spouses. It might be a settlement agreement about the division of assets reached after the couple has separated but before the couple is divorced.

In the aftermath of a divorce, these agreements are utilized to secure a private settlement without the participation of a court or third parties in the proceedings.

Can Separation Agreements include Provisions for Children and Child Custody Arrangements

A Consent Order or a Parenting Plan must be used to resolve disputes involving children.

Is it Possible to have Separation Agreements Rendered Void

A separation agreement can be invalidated by a court of law for a number of different reasons. The following are examples of common reasons:

• if a party fails to reveal the full extent and value of their assets at the time the agreement was negotiated and executed.
• If a party unduly presses or coerces the other party into signing the agreement, the agreement may be voided.
• If the agreement is not reasonable and equitable (fair) it may be thrown out by the court.
• If an agreement was reached via deception, it may be thrown out of court.
• The agreement is to defraud or defeat a creditor (or creditors) may be set aside if it was made with the intent of defrauding or defeating a creditor (or creditors).

What are the three types of separation

There are generally three types of separation recognized in family law:

• Trial separation: A temporary arrangement where couples live apart to evaluate their relationship.
• Legal separation: A formal arrangement recognized by the court, but not equivalent to divorce.
• Permanent separation: When a couple decides to end their relationship permanently, often leading to divorce (separation agreement).

Can you get a divorce without a separation agreement

In Australia, you can obtain a divorce without a formal separation agreement. The primary requirement for divorce is a 12-month separation period, which doesn’t need to be documented in a formal agreement. However, it’s important to note that a divorce only legally ends the marriage and doesn’t resolve issues related to property division, finances, or parenting arrangements.

While not mandatory, a separation agreement (often formalized through Consent Orders or a Binding Financial Agreement) can be beneficial in addressing these crucial and sensitive matters. It provides clarity and legal certainty on asset division, spousal maintenance, and parenting responsibilities.

Even without a separation agreement, you can proceed with a divorce application. However, be aware of time limitations for initiating property settlements post-divorce. It’s advisable to seek professional legal advice to understand your rights and obligations in your specific circumstances.

At Mediations Australia, we offer expert guidance to help you navigate these complex and sensitive issues. Our team of experienced mediators can assist in reaching amicable solutions tailored to your unique situation.

What Should You Do Now

At Mediations Australia, we have a team of family lawyers and mediators who can assist you in Canberra, Perth, Adelaide, Melbourne, Sydney and all other locations in Australia. We also do international family law matters.