separated parties can enter into a binding financial agreement
full and frank disclosure when preparing a financial agreement
Former spouses or de facto partners do not have to wait for their separation to be final to divide their properties. Parties do not have to wait for the finalization of their divorce or separation to settle their property issues.
Even when parties are still contemplating separation, they can initiate a binding financial agreement. Entering into an agreement about finances will pre-empt court actions which help save up on costs, time and the hassle of going through court proceedings.
Binding financial agreement after separation
It is prudent for parties not to wait for their separation to become final before taking care of their property affairs. Executing a binding financial agreement after separation or even when parties are already talking about separating is wise because it will avoid having to go to court. The binding financial agreement will serve as a way for the parties to divide and share their assets, properties and financial resources.
Even when the parties are negotiating out of court, they must still follow fair play and honesty in their dealings. Thus, parties are required to make a full and frank disclosure when preparing their financial agreement. Parties must lay all their cards on the table. Remember that withholding of vital financial information is a fraudulent act which is a ground for invalidating a financial agreement.
To have a fair financial agreement party must know all the properties they each own and the value of these properties. So, parties must prepare an inventory of all their assets with the corresponding values.
Valuing depends on the kind of property. For real estate, the parties may ask quotations from real estate agents who are very knowledgeable in this field. If the valuations differ or that the parties do not agree on the price, they can ask a certified valuer to give a sworn valuation for the real estate property. As for personal properties like cars, machinery, jewellery they can look at the advertised prices of these items and take into account the depreciation.
The time limits provided by the family law are relevant when parties prefer to have their property issues settled through the court. Parties who divorced have 12 months from the time the divorce became final to apply to the court for property settlement and spousal maintenance. For de facto couples they have 24 months from the time of the separation to file an action in court for property settlement and spousal maintenance.
There is definitely a time limit constraint if married spouses have to wait for the finalization of the divorce before they settle their property affairs. If the 12 months for divorced parties and the 24 months for separated de facto couple lapse without a court application being filed then parties have to ask the court for approval in filing an application beyond these periods. The matter is then left to the judicial discretion whether it will allow the application to continue or not.
Disclaimer : This article provides basic information only and is not a substitute for a professional or legal advice. It is prudent to obtain legal advice from a family lawyer.