Separating couples often wonder what needs to be done to formalise the division of the assets and liabilities of their relationship. Avoiding litigation by reaching a private agreement is something that can save both parties money and further stress.
There are two main methods of giving legal effect to an agreement for the division of the assets and liabilities of a relationship. It is important to create a legally binding arrangement that gives security and certainty to both parties as they go on with their lives. Simply writing something down does not make it legally binding, so one of the following options should be followed.
The first option is for the parties to sign Consent Orders which can then be sent to a Court for approval. These Orders should be drafted by a legal practitioner who can give practical advice on the sorts of things the Orders should cover and point out any possible pitfalls which the parties can then avoid. This is the preferable option as it can provide couples with the greater security of having Court-approved and enforceable Orders made.
The second option is for the couple to enter into a Binding Financial Agreement (BFA). BFAs can be entered into by either married spouses or de-factos. They can also be made at any stage before, during or after the relationship or marriage. Both parties are required by law to obtain independent legal advice about the contents of the BFA. BFAs are tricky to get right, so it is important to have the assistance of an experienced family lawyer.
Both Consent Orders and BFAs can provide tailor-made solutions for couples who are able to agree (whether between themselves or by assisted negotiation) on how to sever their financial ties. They allow a dispute to be resolved with dignity and civility while also providing some measure of security and enforceability. Separating couples do well to obtain sound legal advice on their options so as to achieve the best possible outcome and protect their individual rights.