Why is a handshake deal not good enough? Formalising your property settlement

Unfortunately, over the years I have seen too many clients who have worked out an agreement regarding their financial/property settlement with their ex and “shook hands on the deal” or  perhaps they might have written out the agreement on a piece of paper and both signed it.  Then at a later date their ex reneges on the deal or before the limitation period expires decides to they want to renegotiate another settlement.  Without your agreement being formalised, this can happen and it can have a huge impact on your financial situation.

Let me tell you about a client and what happened to them:

John and Stacey

John came to see me about 3 years after he had separated from Stacey.  John and Stacey after separation had amicably worked out a property settlement and sold their house and split the monies from the sale.  At the time of separation, John’s business was doing poorly, it had little work and had a lot of debt.  After separation John put a lot of work into his business and it was doing much better.  John had used his share of the money from the sale of the house and used in buy a new house.  Stacey had taken her share and spent over 50% on a lengthy overseas holiday. 

John filed for divorce and had been divorced about 11 months when Stacey told him she wanted to do a property settlement.  John told her their property was all settled and he wasn’t renegotiating their property settlement.  Stacey filed Court proceedings and this brought John to me.  John and Stacey hadn’t formalised their property settlement, in fact it was just a verbal agreement between them.  John just wanted this all to go away so agreed to cash payment to Stacey.  This new agreement was formalised by the Court making orders by consent.

So how do formalise and finalise my financial relationship with my ex?

I strongly recommend you seek advice from an expert family lawyer on your proposed settlement and get advice on the best option for formalise your agreement and finalise your financial relationship with your ex.

There are only 2 ways that a family law property settlement can be formally finalised and that is:

  1. Orders made by the Federal Circuit and Family Court of Australia;
  2. The parties enter into a binding Financial Agreement under the Family Law Act 1975.

Most people will opt to have their agreement documented by way of Orders made by the Court.  Don’t worry, if you and your ex have agreed a settlement you don’t have to go to Court, it can all be done by submitting an Application for Consent Orders to the Court and a registrar of the Court will review the orders and if it is a just and equitable property settlement, they can make the orders you seek and your financial relationship with your ex is finalised and you can move forward financially.

The other option is the parties enter into a Financial Agreement, often referred to as a BFA.  This is a private agreement between the parties made under the Family Law Act 1975.  Each party has to have a lawyer give them independent legal advice.

To read more about which option is best for your situation, please review our webpages Consent Orders – Property and Financial Agreements. To get assistance from the best family lawyer in Townsville, call us today.