Separating parties who come to an agreement about how they will divide their assets post-separation often decide that they do not want to formally document their agreement and instead, have their ‘agreement’ documented in a statutory declaration signed by both parties in front of a witness.
Presumably this is often done to save money, however it is important to note that there are many ways that documenting an agreement in this way can cause further expense to be incurred in the future, including a party not complying with the ‘agreement’ or where there are assets such as a matrimonial home involved, where transferring the property from one party to another can result in large stamp duty liabilities.
If the agreement between the parties had been documented by Consent Orders or a Binding Financial Agreement (BFA), then the transfer of the property will likely be exempt from stamp duty, which can save parties thousands of dollars at the outset.
Another reason that these types of private agreements are of concern, is that often it can be a way for the stronger party to retain an unfair percentage of property without the other party knowing what they are actually entitled to.
Either way, an agreement documented this way is not binding and enforceable in the eyes of the Family Court and it will often end up being a very expensive exercise if one of the parties decides at some stage down the track that they were entitled to more than they received under their ‘agreement’ (often after the main assets have been disposed of).
The two options mentioned earlier, being Consent Orders or a Binding Financial Agreement (BFA) are both ways to formalise an agreement which is binding, enforceable and final. Consent Orders are filed with the Court and parties do not need independent legal advice (although it is strongly recommended that they do obtain advice as the Court can reject the documents if they are not ‘just and equitable’). On the other hand, both parties will need to obtain independent legal advice for a BFA to be binding and enforceable.
If drafted correctly, these formalised can offer you the peace of mind that your former partner cannot come back at you in the future for further money or assets, and this allows both parties to move forward with their lives.
If you have recently separated we strongly recommend that you contact one of our friendly Gold Coast Lawyers today on 07 5563 8970 for an initial consultation, which is free of charge to ensure that you are aware of your rights, entitlements and which settlement option may be the best for your particular circumstances.