A separation agreement is a legally binding document that formalises your property settlement. As a separation agreement is legally binding, each party must carefully consider their options and what is in their best interest prior to signing a separation agreement.

Separation Agreement Lawyers in NSW

What is a separation agreement?

A separation agreement (also known as a ‘deed of separation’ or  ‘property settlement agreement’) is a legally binding and enforceable document that sets out the terms of a financial separation between two people i.e. who gets what when a couple separates.

A separation agreement is more accurately known as a ‘Binding Financial Agreement’ under the Family Law Act, also known as a BFA. A separation agreement can be entered into at any time.

To assist separating couples, our Family Law Team has drafted the following FAQs to assist you in making this important decision.

Separation Agreement FAQs

1. What is the purpose of a separation agreement?

To formalise your property settlement and provide both parties with legal certainty regarding the division of the assets and debts of your relationship.

2. What are the benefits of using a separation agreement?

A separation agreement will save you both a lot of time, money and stress by:

  1. Keeping the relationship amicable and out of Court; and
  2. Preventing future disputes (less stressful, more certainty); and
  3. Possibly saving you from paying stamp duty and CGT on transfer of property.

See Articles

  • Capital Gains Tax and Family Law Property Settlements
  • Capital Gains Tax Rollover Relief: A benefit for some, a potential liability for others!

3. When is a separation agreement legally binding and enforceable?

All types of Financial Agreements must comply with strict legal guidelines as outlined in the Family Law Act:

  1. They must be in writing and signed by all parties.
  2. Each person must have received independent legal advice before signing the Financial Agreement.
  3. The legal advice provided must have come from a lawyer in the Australian jurisdiction.
  4. Each person must have signed the Financial Agreement voluntarily (free from coercion, duress or undue influence). For example, this means one person cannot tell the other that they will not marry them unless they sign a Prenuptial Financial Agreement.
  5. The Financial Agreement should contain a complete disclosure of each person’s financial circumstances.

4. Do I need to see a lawyer?

Yes, it is mandatory. Each party must obtain independent legal advice prior to signing a separation agreement. You also cannot use the same lawyer and should not use the same law firm.

If you fail to obtain advice from a lawyer, the separation agreement will be unenforceable.

Note: You cannot just quickly “see” a lawyer or have the lawyer “witness” you sign the agreement, you must obtain a ‘Certificate of Advice’ from them (see below).

5. What is a Certificate of Advice?

After your family lawyer has reviewed your separation agreement and provided you with advice, they will give you a ‘Certificate of Advice’ which you will sign to acknowledge that you have received it. You must then give a copy of this certificate to the other party and vice versa. Only when both parties have received a copy will you have fulfilled the requirement of section 90G of the Family Law Act 1975.

6. Who drafts the separation agreement? Can I prepare it myself?

It is always recommended that a specialised family lawyer drafts the agreement.

Having a lawyer draft the agreement will ensure the terms are written in a clear and concise manner that will make it easier for both parties’ lawyers to review and provide a Certificate of Advice.

Avoid online separation agreement templates, these very rarely meet the legal requirements and are highly likely to be overturned by a Court if contested.

7. Can a couple in a defacto relationship separate using a separation agreement?

Yes, a separation agreement is suitable for ending defacto relationships (also known as a ‘defacto separation agreement;), including those in a same sex relationship.

8. Can a couple enter into a separation agreement after they have divorced?

Yes, this type of separation agreement is commonly known as a ‘Post Divorce Property Settlement Agreement’ and is another type of BFA.

Note: Time limits do apply. If you are divorced you must formalise your property settlement within 12 months of your divorce.

9. Do I need to go to Court to get my separation agreement finalised?

No. One of the benefits of using a separation agreement is that you do not have Court involvement.

10. What is the difference between a separation agreement and a Court order?

A separation agreement does not go through the Courts.

A Court Order or Consent Order is a legally binding Order made by a Family Court after they have reviewed an application for property settlement. The Court must agree that the outcome is just and equitable prior to making an Order.

11. What is the difference between a separation agreement and a prenuptial agreement?

A separation agreement is a BFA that is entered into AFTER two people separate.

A prenuptial agreement (prenup) is a BFA that is entered into BEFORE two people separate.

For those about to marry, already married or separated, the Family Law Act allows them to sign a Financial Agreement. There are three types of Financial Agreements:

  1. Before marriage agreements, where spouses wish to quarantine previously acquired assets from the consequences of separation, or where one spouse comes into a marriage already holding interests in family business structures and there is a desire to protect those business assets from involvement in a Court dispute.
  2. During marriage agreements, can be used in several circumstances. It may be an agreement made when the parties are happily together and have the same effect as a pre-nuptial agreement, just made after marriage. It may be used when a marriage is in difficulty and a re-arrangement of assets is made to provide security for one or more spouse, as an asset protection measure. It could be an agreement about division of assets made after separation, but prior to divorce.
  3. After divorce agreements, used as a means of securing a private settlement without any involvement of a Court or third parties.

See Also: What is a prenup?

12. Should I download a separation agreement template?

No. There is no ‘one size fits all’ separation agreement. Every relationship is different, which means every separation agreement is different.

This is especially true when there are children involved. We always recommend that a lawyer draft your separation agreement.

Avoid online templates, these very rarely meet the legal requirements and are highly likely to be overturned by a Court if contested.

13. Can a separation agreement cover children and parenting arrangements?

No. Children’s matters must be resolved by a Consent Order or a Parenting Plan.

An Application for Consent Orders is filed with the Family Court of Australia. These Orders formalise the agreement parents reach regarding the long term care, welfare and living arrangements for their children. Consent Orders, once made, are final and may be subject to a Contravention Application, should one parent refuse to comply with the terms of the Order. Both parents are obliged to comply with the Order once made.

In the alternative, parents may enter into a Parenting Plan to formalise arrangements in relation to children. A Parenting Plan is similar to Consent Orders and may deal with:

  • the amount of time in which the parents would spend with the child;
  • where the child may live;
  • the allocation of parental responsibility;
  • communication with the child;
  • the process for resolving disputes about the living arrangements of the child in the future; and
  • the process to be used for changing the plan, taking into account the changing needs and circumstances of the child.

Because the Parenting Plan is not a legally enforceable document that is filed with the Family Court, Parenting Plans cannot be subject to any Application for contravention and are therefore not enforceable by the Court.

See Also: Parenting Arrangements

14. Can a separation agreement be set aside (made invalid)?

Yes, a separation agreement can be overturned by the Court for several reasons. Common reasons include:

  1. Non-disclosure – If a party does not disclose the full extent and value of their assets at the time when the agreement was drafted and signed, it may be set aside.
  2. Unreasonable Pressure – If a party unreasonably pressures or coerces the other party into signing the agreement, it may be set aside.
  3. Unfairness – If an agreement is not just and equitable (fair), it may be set aside.
  4. Fraud – If an agreement was obtained by fraud, it may be set aside.
  5. Defrauding or defeating a creditor – If an agreement was made to defraud or defeat a creditor (or creditors), it may be set aside.

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