A binding Financial Agreement are a means for couples, whether married or de facto, to set out the way some of all of the couple’s assets will be divided in the event that their relationship breaks down. It is a contract between the parties made update Part VIIIA (marriages) or Division 4 of Part VIIIAB (de facto relationships) of the Family Law Act 1975
A financial agreement can be entered into before marriage, during a marriage (regardless of whether a divorce has occurred), and/or after divorce.
Is the Financial Agreement binding?
In order to be binding, a Financial Agreement must meet certain requirements set out in Sections 90G (marriages) and 90UJ (de factor relationships) of the Family Law Act 1975.
In order for the Financial Agreement to be binding, it must:
- Be in writing and signed by all the parties;
- The parties must not be party to another financial agreement concerning property settlement or spousal maintenance matters;
- The parties must receive advice from independent lawyers in respect of the effect of the agreement, the affect on the rights of the parties, and whether or not it was to the advantage of the parties to enter into the agreement;
- State the relevant section of the legislation;
- The parties are to receive a statement from their solicitors that they have been provided with sufficient advice;
- The Financial Agreement cannot be terminated or set aside by the court.
Practical things to consider when entering into a Financial Agreement
It is prudent to consider a Financial Agreement to protect your assets when entering a serious relationship.
A Financial Agreement may be appropriate when:
- You may have more money, property or other assets than your partner at the beginning of the relationship;
- You want to ensure that certain property or assets are properly divided in the event of a separation;
- You want to have an up front agreement in place on division of assets instead of having a court decide the dispute later;
- You operate a family business or have property or investments that you wish to preserve or make certain arranges on how they are deal with;
- You have children who you wish to pass your assets to;
- You anticipate receiving a large inheritance or gift at a later stage;
Can the Court set aside a Financial Agreement?
The Court has the power to set aside a Financial Agreement in some circumstances under Sections 90K (for marriages) and 90UM (for de facto relationships) of the Family Law Act 1975.
You should seek independent legal advice if you think a Financial Agreement which you are a party to should be set aside.