Documenting a Property Settlement
Under the Family Law Act, a property settlement agreement can be formalised in two ways, either by an Application for Consent Order (i.e. Minutes of Consent) or by way of a Binding Financial Agreement (BFA).
It is important to remember that once the Agreement is formalised in accordance with theFamily Law Act, it will be considered binding. Setting aside a Financial Agreement or a Consent Order under the Family Law Act is a difficult and expensive process, and is only possible in very limited circumstances. You should therefore not enter into an Agreement hoping that later on you may be able to have it set aside based on some legal point.
Financial Agreements (BFA’s) are not filed with the Court and are therefore not examined by the Courts. Because of that, it is essential for both parties to obtain independent legal advice in relation to the Agreement and, in fact, a Certificate of Independent Legal Advice must be attached to the Agreement itself (for each party) and refer to the following matters:
- The effect of the Agreement on the rights of that party; and
- The advantages and disadvantages, at the time that the advice was provided, to the party in making the Agreement.
A Consent Order can be made by the Court. An Application for Consent Orders (when prepared in the standard form) outlines the effect of the Orders sought and each party’s financial position, and is filed with the Court. The Court may decline to make Orders if, in the Court’s view, the proposed Orders are not just and equitable.
If an agreed property division is not formalised by way of a Consent Order or by a Binding Financial Agreement in accordance with the Family Law Act, it remains open to either spouse to bring an Application to the Court asking for a further property adjustment at any time in the future. Therefore, it is very important to ensure that your property settlement is formalised in accordance with the requirements of the Law.