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What happens if my partner and I can reach an agreement?

Podcast Episode by Pearsons Lawyers
13 December 2020

(Transcription)

Leanne Abela:
Hello, I’m Leanne Abela.

Joe Schepis:
And I’m Joe Schepis.

Leanne Abela:
Welcome to the third podcast of Pearsons law. Today’s topic is, “what happens if my partner and I reach agreement?” And we’re going to discuss the various stages and the options available to you.

Joe Schepis:
That will include, how we go about reaching an agreement. Sometimes clients come in, and they come in with good news that they have already had some discussions and have reached an agreement about parenting, property, and sometimes other issues like child support. In those cases, what we do is we go through and obtain information from the clients about the history of the acquisition of property. The contributions that they’ve made, the property pool. Assess needs, and then we test to see if the agreement that they’ve reached is a good agreement or bad agreement.

Leanne Abela:
The reason we test that, because you may be wondering why on earth we bother, that is, if you and your partner have reached an agreement, why do we even need to ask those questions? The reason is there are two products available when people do reach agreement and Joe, that’s, the binding financial agreement, isn’t it?

Joe Schepis:
The binding financial agreement is one.

Leanne Abela:
Which, is not ratified by the court. It’s put into a safe and the second product, which is the favorite product, is an application and consent orders. And that is ratified by the court so that we can sell you the best product. And they’re about similar in price, anyway. We need to test which category you fall into. If we think that the settlement you have reached is out of the ballpark, of what a court would ordinarily do. Well, the BFA is the best product for you, which is a binding financial agreement. If we think it is in the range, then the product will be the consent order.

Joe Schepis:
And, the reason we do that is because when you submit an application and consent orders to the court, a registrar of the court, who’s a lawyer employed by the government, needs to go through the factors that a judge would go through and they need to make up their mind and come to a decision as to whether that agreement is in the range, that a court would achieve. If it’s within the range, they’ll give it the seal of approval of the court and they become sealed orders.

Joe Schepis:
If it’s not in the range or there’s something wrong with the information that’s provided to the court that will give what’s called requisitions. And once they’ve been given all the requisitions, which are mostly questions, asking more information.

Joe Schepis:
And if the registrar comes to the conclusion that the agreement is not something that the court will give its approval to, then they can refuse to make those orders. Which is not necessarily the end of it all. Because if the court refuses, the parties are left with still going through the means of having a binding financial agreement prepared. And that’s a different process and involves a different scenario, which Leanne will take you through now.

Leanne Abela:
Well, the information really in a BFA and in a consent application is pretty similar. And that is, we need to know information about your bank accounts, values of assets, such as real estate, motor vehicles, superannuation, and then we do the actual division.

Leanne Abela:
And so there, the documents, that are left to us as the lawyers. I think what’s really interesting, and I don’t know if you find this as well, Joe, is that people come in and they say, “Yes, we’ve reached agreement.” So we’ve got a reasonable idea of what it looks like, but they haven’t thought about other things, like child support.

Leanne Abela:
So, there is a product called a binding financial agreement for child support, which says that you each pay child support as assessed by the child support agency, or either party can, plus school fees, books, uniforms, health insurance, out of pocket expenses can also be covered. And people often haven’t thought of that. Do you find that when clients come to see you?

Joe Schepis:
I do find that. And what I find is that in the main, people are happy with whatever the child support agency assesses, but sometimes when the parties or one of the parties is a high income earner, and they’ve made specific arrangements for the education of the children. For example, private school fees, or there’s some special needs of the children, then the parties might come to a different arrangement about the future financial support of their children.

Leanne Abela:
Well, the best way to actually lock that in is when they’re in agreement.

Joe Schepis:
Absolutely.

Leanne Abela:
Because, because you know, you can’t “crystal ball.” Today that you and your partner might agree on a settlement, next year, next week in fact, that might all collapse. So you’re better off locking in everything.

Joe Schepis:
Your partners come into the equation, all sorts of things might happen.

Leanne Abela:
Your partners inheritances, you’re better off locking it in when you do reach agreement because it’s cheaper and it gives you also a sense of security.

Joe Schepis:
I think one thing that people need to understand is that when you do either a binding child support agreement or a binding financial agreement, both parties need to have a lawyer and the lawyers need to sign off on what’s called certificates of independent legal advice, so that the parties understand exactly what they’re going in for as far as your own agreement is concerned. And the individual and independent lawyers have given them advice about those matters.

Leanne Abela:
Finally, one set of lawyers, only one lawyer prepares the documentation. So that’s the heavy lifting, more expensive part. Then the other party takes that document of their lawyer to get it checked out and to get a certificate signed. So it’s the party who is preparing the documents, who has the greater expense. Now that’s not something we tell you that you’ve got to do; that is each of you get a lawyer. The family law act requires that for it to be a valid agreement. You can also do a binding financial agreement in relation to spousal support. And often people come in and they have no idea about that.

Leanne Abela:
So firstly, they have no idea that you can even claim wife or husband or de facto partner or same-sex relationship support, which you can. You can claim financial support if you are unable to support yourself. And the other person has the capacity to pay you a regular income. So it’s not just child support, it’s spousal support. And that can be locked in for regular payments for a specific period of time, but also you can lock it out. And that’s most commonly what we do. We do these binding financial spousal agreements that say, neither party can claim maintenance off the other one for themselves, not for the children, but for themselves moving forward. And that’s again, a good sense of security that people can get, and don’t even know that they’re entitled to get that sense of security. So we like to package everything up.

Joe Schepis:
Very important, because that gives people financial security and an end to their financial relationship. And another thing I think that we find is, as sometimes people come in and they tell us how they reached an agreement five years ago. They engaged in some financial transactions, but never actually had it formalized. And what people need to understand is that there are time restrictions and time constraints. So in relation to married couples, once a divorce order is made, there is a 12-month period within which each party can apply to have property orders made or spousal maintenance orders made. After that time, the court doors are locked unless they get permission from the court and that’s risky and expensive.

Joe Schepis:
In relation to de facto on same sex couples under the family act, they have two years from the date that the relationship broke down. So, that’s very important that people understand that. And bear that in mind when negotiating. That, you can’t negotiate into the never-never, into the future, you need to bear those timeframes in mind.

Leanne Abela:
The other thing that’s important to realize is, if there is no divorce and you cut the deal between yourselves, that is all well, we sold the family home. I got this amount, he got that amount. We left everything as it was. We’re pretty happy with that. What we need to unfderstand is if you were never divorced, then the person can come back 5, 10, 20 years later. And what you’re looking at-

Joe Schepis:
And we’ve had those cases.

Leanne Abela:
-And we’ve had those cases. I’ve got one at the moment where the parties separated in 2008. It’s now 2020 and my client’s re-partnered, but he hasn’t done a formal settlement with his first wife and they’re not divorced. And so the problem is that we’re now taking the assets that exist today, which, what he has done from the proceeds of the sale is he’s bought another property. So that’s up now for grabs. So it gets very complicated and very messy. My view always is, clean up behind you. It’s like sweeping the floor. Don’t let the pile build up, clean up behind you. Formalize things behind you. And in any event, there is no disadvantage in coming to Pearsons and getting your free first appointment, no obligation. So you know exactly where you stand and you can sleep easy and know what products you need or what you don’t need. And that, that would be my best advice to clients, don’t you agree?

Joe Schepis:
Absolutely, and it’s important that you know exactly what your rights and obligations are. Not only in relation to property. But like we said, spousal maintenance, child support, and in particular, in relation to any time constraints that might apply. So it’s important to make your appointment, come in and see someone. Get some expert advice about your family law matter so that you know where you stand.

Leanne Abela:
So, before we leave you, the next podcast is going to cover those cases that don’t settle. So a very commonly asked question is “what happens if my partner and I can’t reach agreement? What are the options open to us? And what are the different pathways we can take?” Until then goodbye from Joe and Leanne.

Joe Schepis:
Goodbye. See you next time.

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