In essence, a Property Settlement Agreement Tugun is a contract determining what happens to your real estate property and finances after the end of your relationship with your spouse.
This agreement, fully documented, is a legally binding contract that summarizes the fundamental provisions for splitting property, assets, and financial obligations between divorcing partners.
It is a crucial document in a divorce settlement, as it defines each spouse’s privileges, responsibilities, and obligations regarding the property and financial matters.
Division of properties
In addition, when couples choose to divorce, they must split the property and assets acquired during the marriage. This property settlement agreement can help streamline the process by clearly specifying who obtains what and how debts and assets will be divided.
This official document is typically negotiated and agreed upon by both parties. Once it is signed by both parties it is a legally binding document.
Having a well-written, detailed, and exhaustive property settlement agreement is crucial, as it can help prevent prospective conflicts between the parties.
The agreement has many elements that need to be defined and recognized so it will be clear to the divorcing parties and to whoever want to read and know the particulars of such an agreement.
Here are the elements of the agreement.
Identification of assets and liabilities
A property settlement agreement must record all assets and liabilities obtained during the marriage. These are all the real estate, personal property, vehicles, bank accounts, investments and other assets of each party.
The settlement agreement also must list down the liabilities of each (or jointly assumed) such as loans, mortgages, and credit card debts. .
Division of assets and liabilities
The property settlement agreement should specify how assets and liabilities will be split between the parties. It includes how much each party will obtain and how debts will be settled.
Spousal and child support / retirement accounts / life insurance / taxes
The agreement may include spousal and child support provisions. It is monetary support settled by one partner to the other and care for children after the divorce.
The agreement should summarize how retirement accounts will be split, including personal retirement accounts (IRAs) and pensions, 401(k)s.
Likewise, the agreement needs to specify whether life insurance policies will be maintained after the divorce and who will be the beneficiary.
The agreement should also take into consideration the tax implications of the property and financial settlement. This includes the tax treatment of alimony and child support payments and the tax consequences of property transfers.
Binding Effect / Date of execution / signatures of the parties
The property settlement agreement should clearly express that it is binding on both parties and may be executed in court. The document must also specify the date it was executed.
Finally, in order to be an official document, the property settlement agreement should have both parties and their attorneys sign the property settlement agreement.
Finances in divorce
After reaching an agreement on how your property will be distributed after separation,
it is essential to document the agreement in a formal way.
Without a formal agreement, that is, either a consent order made by the Family Court of Australia or a financial agreement entered into under the Family Law Act, there is no certainty that e agreement can be executed at all.
There were past scenarios where the parties have written down their agreement on a piece of paper, gone to the effort of signing it in the presence of a Justice of the Peace, only for the agreement to be ignored when one party seeks a further distribution of property.
This written agreement, signed in the presence of the Justice of the Peace or some other witness, is not a binding document. It will need a consent order or financial agreement.
After both parties have reached an agreement regarding the matter on property, the parties must make an application to the Family court of Australia to have the agreement made into a formal court order.
This process involves completing an Application for Consent Orders and preparing formal court orders (proposed Orders) in the form that will be accepted by the court. The parties sign the Application and proposed Orders and lodge them with the Family court, paying the required lodgement fee.
Incidentally, this process can be done with ot without legal advice. (It is suggested that the petitioner seek advice on the proposed Orders to make sure that they are within the range that the court would find acceptable, and therefore make the orders. )
It is also important to consult a lawyer about the drafting of your proposed Orders.
You can enter into a consent order about all aspects of property settlement, save and except that you cannot contract out of any spouse maintenance obligation. Any reference to spouse maintenance is best dealt with in a financial agreement.
An alternative way to formalize your property settlement is through a financial agreement.
It can include all of the same information and agreement (similar to the proposed Orders) that you have reached.
The difference is in the strict legal obligations imposed by the Family Law Act. These exist because through a financial agreement, you are contracting out of your right to have the Family Law Courts determine your property matter, including any right to spouse maintenance.
Making the financial agreement binding
First, it should be in writing, and signed by all signed by all parties.
Before signing the agreement, each party must receive independent legal advice from a legal practitioner about the effects of the agreement. It shall be about the rights of the party and the advantages and disadvantages of entering into the agreement at the time the advice is provided.
Before signing, each party must receive a signed statement by the legal practitioner confirming that the above advice was provided with a copy of the statement provided to the other party or their lawyer.
The agreement has not been terminated by further agreement or set aside by the court.
Because of the nature of a financial agreement, there is a significant amount of work that goes into the agreement to make sure that the strict legal requirements are complied with.Also, the financial agreement is binding and protects your interests.
This where a financial agreement differs to a consent order given the strict requirement for independent legal advice. Both parties must engage with and attend upon a lawyer for advice about the Financial Agreement.