Whether we’re talking about parenting arrangements or working out how to split property and assets, many separating couples are able to reach informal agreement between themselves. And that’s great: achieving agreement on issues without needing to ask a court to make a decision is always preferable. But it’s important that you consider making any informal agreements official. We all know the advice to “get it in writing”, but it becomes especially important when it comes to family law agreements. So what are the benefits of formalising your family law agreements?
Formalising your parenting agreement
So why is it a good idea to formalise your family law agreements when it comes to parenting matters?
1. It will reduce the chances of your co-parent acting against your informally agreed arrangement
A major risk for parents who have not formalised their parenting arrangements is that their co-parent may simply withhold the child one day, or move them to another location without your agreement.
As amicable as your informal agreement may be, in the absence of court orders (by consent or court-ordered), there are no legal consequences if either parent chooses to withhold the child.
However, when there are formal orders in place, if a co-parent withholds the child or relocates them, there are avenues to enforce compliance with the orders by filing a contravention application.
2. It provides predictability and stability
Parents can plan their lives better knowing what the arrangements will be for the children, and won’t need to constantly communicate with their co-parent to work out what arrangements will be. This reduces stress, not only for the parents but also the kids, who will have a more stable routine.
3. Follow-through is easier if it’s all in writing
When things are clearly documented in detail, there is less chance of conflict over what you had agreed, of one co-parent claiming their agreement was misunderstood, or of one parent simply changing the terms when they feel like it.
How to formalise parenting arrangements
Informal parenting arrangements can be formalised with consent orders. These are written agreements that are filed with the court. The court will seal the orders, provided it agrees that the orders are in the children’s best interests. Consent orders are legally binding on both parents and must be complied with.
Although it isn’t necessary to obtain legal advice regarding consent orders, but it is still a very good idea to do so. Consent orders are a cost-effective way to formalise your family law agreements and can cover both parenting and financial matters (see below).
Formalising your property settlement
1. Gain more certainty
Formalising your family law agreements regarding property and financial matters gives you clarity and certainty over the details of the agreement you reached.
2. Reduce the risk of future claims by your ex
When you formalise your property settlement, you achieve finality in your matter as the agreement is then binding on both parties. By contrast, an informal agreement runs the risk that your ex could subsequently still bring a claim against your assets.
3. Enjoy a stamp duty exemption
Formalising your family law agreements with respect to property means that you get the benefit of not paying transfer duty on transactions which give effect to a court order or Binding Financial Agreement made in accordance with the Family Law Act (most often, this relates to transfer of a party’s interest in the matrimonial home to the other party).
4. Have the safety net of enforceability
If there are any problems with effecting the provisions of your formalised agreement, the obligations in it can be enforced by the courts. For instance, the court may sign required documents on the other party’s behalf, or can make further orders to enforce the agreement.
How to formalise your financial agreements
You have the choice of either formalising your property settlement with consent orders (which can be combined with parenting consent orders), or by entering into a Binding Financial Agreement. Both are legally binding but differ in important ways and it’s recommended to check with a family lawyer as to which option is better for you.
Consent orders are formal orders issued by the court based on agreements reached by the parties. On filing with the court, the court will still check that the agreement is just and equitable, ie. fair to both parties.
Property consent orders can handle things like what is to happen to the family home, how all assets and liabilities will be divided, cash payments, super splits, and spousal maintenance.
Binding Financial Agreements are a private agreement outside of the court system. Because a court doesn’t check off on the terms, as it does with consent orders, it is necessary for each party to obtain independent legal advice before signing, to reduce the risk of the agreement later being challenged and potentially set aside. BFAs can’t include parenting matters.
I’ve received draft documents – what should I do next?
It’s highly recommended that you obtain advice from a family lawyer before you sign and formalise your family law agreements. Your family lawyer will help you understand your legal obligations and advise you on provisions you should consider including as well as any red flags or provisions that should be amended in your best interests. Their critical review of your proposed consent orders will ensure your rights are maintained and that all key information is included.
Need help with formalising your family law agreement? Whether it’s for parenting arrangements or a property settlement, for a confidential appraisal of your situation and to determine your best next steps, please call Canberra family lawyer Cristina Huesch or one of our other experienced solicitors here at Alliance Family Law on (02) 6223 2400.
Please note our blogs are not legal advice. For information on how to obtain the correct legal advice, please contact Alliance Family Law.