Making Your Financial Settlement Legal

A Property Settlement, Financial Settlement, or Divorce Settlement refers to the division of property shared between you and your former partner. This typically includes assets, liabilities, and superannuation, although it may sometimes extend to other shared resources.

There are several ways to reach an agreement on your settlement, depending on your circumstances and preferences.

Ways to Reach a Property Settlement

1. Direct Negotiation
   Often referred to as "kitchen-table negotiations" or conducted through email, this approach allows you and your former partner to decide together how to divide your assets without involving third parties. It’s best suited for amicable couples who can communicate effectively and reach agreements independently.

2. Mediation
   Mediation is ideal when there’s uncertainty or conflict about dividing property and finances. An independent expert mediator facilitates balanced and constructive discussions, helping both parties reach a fair resolution. This approach is suitable for cooperative couples seeking to settle respectfully, with minimal involvement from lawyers.

3. Engaging Lawyers
   If communication has broken down or conflict over the settlement terms is significant, divorce lawyers may need to step in. They can assist in determining each party’s entitlements through letter-based negotiations. However, this process can become expensive quickly, as it often follows a billable hours model, leading to escalating and unpredictable costs.

4. Family Court
   When conflicts escalate further—such as issues with disclosure or disputes over settlement terms—a resolution may require intervention from the Family Court. This process is lengthy, often taking over a year to finalise, and should be considered a last resort due to the time, cost, and stress involved.

Making Your Financial or Property Settlement Legally Binding

Once you’ve reached an agreement on your financial or property settlement, there are three ways to make it legally binding:

1. Financial Agreement (also known as a Binding Financial Agreement -BFA)
   A Binding Financial Agreement is prepared by a family lawyer and can be used when couples wish to divide their finances in a way that falls outside what the Family Court might deem appropriate for their circumstances.

   While BFAs are a useful tool in many settlements, it’s important to note that both you and your former partner must receive independent legal advice on the terms of the agreement for it to be legally binding.

2. Consent Orders
   After agreeing on the terms of your settlement, a Consent Order can be drafted and submitted to the Family Court. The court will review the agreement and, if satisfied that the settlement is "just and equitable," will seal the order, making it legally enforceable.

3. Court Order
   A Court Order is issued by a judge following a court hearing or trial. This process gives limited control over the terms of the settlement, as the decision rests with the court. It is typically very expensive, time-consuming, and only a small percentage of cases proceed to this stage. This option is usually considered a last resort.

There are significant advantages to making your financial settlement legally binding:

• Stamp Duty and Capital Gains Tax Relief on the transfer of real estate

• Protection from Future Claims by either party

• Financial Independence from your former partner

• Legally Binding and Enforceable, ensuring your settlement is upheld

• Peace of Mind, knowing that your agreement is secure and final

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Simple Separation offers a comprehensive end-to-end solution to help couples legally finalise their separation and divorce. All legal services are provided by a team of Family Dispute Resolution Practitioners, independent Family Lawyers, Estate Planning Lawyers, and Conveyancers, all of whom share a common philosophy—to make separation amicable and affordable.