To be binding and enforceable any matrimonial property settlement agreement reached between parties needs to be formalised under the Family Law Act. If it is not formalised properly then it can be reopened by either party at a later time.
There are two ways to formalise a matrimonial property agreement.
The “old” way is by way of Consent Orders lodged in the court. This involves two separate documents being prepared between both parties and their lawyers, and once everyone is happy, they are then signed and lodged with the court. The Court Registrar then reviews the documents and assesses whether they are correct, and whether they should be approved and issued. The Registrar may issue requisitions in which further queries are raised which must be answered before the draft Orders can be approved. There is a court fee payable. In our experience lawyers typically charge about $5,000 to $6,000 for Consent Orders.
The better way is by way of a Binding Financial Agreement (BFA) under the Family Law Act. This is a contract which sets out the terms of the agreement between the parties. Each side must get independent legal advice. If done properly they are just as enforceable as Consent Orders.
Like Court Orders any transfer pursuant to a BFA is exempt from stamp duty.
The reason we recommend and use Binding Financial Agreements for clients is that they are cheaper, and quicker, but still completely legally binding.
If we draw up the BFA we charge a fixed fee of $3,000 plus GST to take it from start to finish. We should say that many other lawyers charge much more for a BFA, but our low overheads compared to other firms mean we can do it for a significantly lower fee than average. Rather than charge on an hourly rate (which can be open ended) we do it for a fixed fee to provide certainty to the client. On occasions there is some haggling about the detail, but unless there is a fundamental dispute, we still charge the fixed fee. Our fixed fee quote allows for a degree of further discussion, and negotiation. It is only if matters take a completely anticipated turn that we would deviate from that fixed fee quote.
With a BFA the other side must get independent legal advice. We can recommend another experienced Family Lawyer who will give the independent advice for approximately $900 plus GST. Sometimes the independent lawyer selected randomly by the other party will charge thousands for their advice work, even though we create the document and do most of the work. If the other party intends using someone other than our recommendation we strongly advise that they get a fixed quote so they know that they are not paying too much.
As well as being half the price of Consent Orders, the other reason for using a BFA is that with a high level of cooperation between the parties and their lawyers these documents can be done and completed within approximately 3 weeks. Typically Consent Orders (even with high cooperation) can take 6 to 8 weeks to be prepared, haggled over, signed, lodged with the court, and then (hopefully) approved by the Court.
At Macpherson Family Law we always recommend BFAs to formalise a Property Settlement for two simple reasons – Time and Money. Let’s face it, who wants slow and expensive (Consent Orders) when with a BFA you can have a quicker (but equally binding) outcome for significantly less.