Legally Binding Agreements
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Legally Binding AGreements
There are different types of agreements that can be drawn up between parties with respect to financial matters and parenting matters. However, there are only certain types of agreements that are considered legally binding and enforceable.
Parenting
When it comes to separation and parenting matters, there is no law that requires parents to have a legally binding agreement in place regarding their parenting matters. Some parents can manage their parenting arrangements verbally, or in a non-binding agreement, such as a parenting plan. However, depending on your circumstances, it may be necessary that parenting agreements are documented into a legally binding agreement.
Parenting Orders
Parenting Orders are the only way to enter into a legally enforceable agreement regarding parenting matters. A Court can make a parenting order based on agreement between the parties (consent orders) or after a hearing or trial.
A consent order is a written agreement that is approved by the Court. Any person who is concerned with the care, welfare and development of a child can apply to the Court for consent orders. The parties will still need to apply to the Court to approve the consent orders and the Court must be satisfied that the orders sought are in the best interests of the child.
Parenting orders create legal obligations between the parties and there may be consequences if a party does not comply with a parenting order.
Property
Like parenting matters, there is no law that requires parties to document their property settlement matters into a legally binding agreement. However, there may be some advantages to doing so, and depending on your circumstances, or the type of property settlement reached, it may be necessary to do so.
For example, where the parties intend on splitting a superannuation interest as part of the property settlement, the parties will need to document the agreement into a legally binding agreement and serve it on the trustee of superannuation fund to give effect to the agreement.
Where the parties are transferring interests in property, they are entitled to an exemption of stamp duty under the Family Law Act 1975. When a property is transferred from one party to another, or joint names to one party’s name, each of these transfers attracts stamp duty. To claim the exemption, you must document your agreement into a legally binding agreement and provide this agreement to the Title Registry Office when you file any transfer documents.
Property/financial Orders
There are two different ways in which parties can document their property settlements, either by way of property/financial orders or a binding financial agreement. A Court can make property/financial orders based on agreement between the parties (consent orders) or after a hearing or trial. The parties will still need to apply to the Court to approve the consent orders and the Court must be satisfied that the orders sought are just and equitable in the circumstances.
Binding Financial Agreements
Binding Financial Agreements (BFA) can be made before, during or after a relationship. BFA’s made before a relationship are generally known as a “pre-nup”. Unlike a Court order, BFA’s do not need to be approved by the Court.
However, the Family Law Act 1975 set outs the requirements that the parties must comply with to ensure that the BFA is binding, including both parties must have received independent legal advice before signing the agreement. There are also some circumstances where a Court may set aside or terminate a BFA, such as if the agreement was obtained by fraud.
If parties do not have a legally enforceable agreement in place regarding their property settlement, either party can file an application to the Federal Circuit Court seeking orders for a property adjustment, even if there has already been an informal property adjustment between the parties following separation. This is even more important for married couples as the time frame to file an application to Court for a property settlement does not start until the date of divorce, not separation, and in some circumstances, that may be some years after the parties have actually separated.
When looking to finalise your family law dispute into a legally binding agreement, it is important to obtain independent legal advice in relation to your situation and to discuss your options. A lawyer will be able to explain your legal rights and entitlements under the Family Law Act 1975, how the law applies to your case and the most appropriate strategy for your situation.