The Family Law Act allows married and de facto couples to enter into private Financial Agreements that do not need the review of the Court. Financial Agreements can deal with how couples intend to divide their property and superannuation in the event of separation or after separation has occurred.
Financial agreements can be entered into:
- Before marriage (also known as pre-nuptial agreements) or before living together;
- During marriage or during the de facto relationship;
- After separation; or
- After divorce.
Financial Agreements are very technical documents and can only be completed with solicitor involvement. We can provide you with advice at any stage of the agreement process; whether you are contemplating having an agreement prepared, your spouse has given you one to consider or you have entered an agreement and have now separated.
Financial Agreements can also reflect any agreement reached regarding spouse maintenance. Importantly, spouses can use these Agreements to agree that neither will make an application to the Court for maintenance in the future. The executed Agreement prevents a party who has signed an Agreement from bringing an application to the Court in relation to spouse maintenance.
Please note our Firm does not prepare pre-nuptial agreements.
Financial Agreements FAQs
Q. Can a Financial Agreement be set aside, terminated or cease to be binding?
A. Yes it can, but it is important to remember that once a Financial Agreement is entered into correctly, it will be considered binding and the setting aside of the Financial Agreement (without the other party’s consent) is a difficult and usually expensive process. The circumstances in which the Agreement can be set aside include:
- Fraud (dishonesty)
- The logistics of the agreement are impractical to implement,
- There has been a major change concerning the care and welfare of children, or
- One party to the agreement acted in an unconscionable (unethical) way.
Once entered into, Financial Agreements can only be changed by entering a subsequent Financial Agreement which entirely replaces the earlier agreement or by making a written agreement (known as a Termination Agreement), which terminates the earlier agreement.
A Financial Agreement made between de facto partners will cease to be binding if, after making the Agreement, the parties to the Agreement marry each other.
You should not enter into an Agreement hoping that later on you may be able to have it set aside or terminated. You should not rush into entering a Financial Agreement and you should carefully prepare your Agreement with your solicitor.
Q. What terms can be included in your Financial Agreement?
A. Deciding on the terms to be included in your Agreement is largely up to you and the other party. Terms that need to be included to ensure the Agreement is binding include a complete schedule of all the assets, liabilities and superannuation of the parties.
You will need to consider a range of issues and your family law solicitor can assist you with negotiating appropriate and thorough terms to include.
Q. Can people enter a Financial Agreement even if they don’t live together?
A. Yes, a Financial Agreement can be entered into before a couple live together to provide for the circumstances of their separation and how they would divide their property following separation.
Q. What are the advantages associated with entering a Financial Agreement?
A. The Agreement offers certainty of the finalisation of property settlement matters and you will avoid the considerable time, costs and risk in litigating the matter in Court.
There is no requirement that the settlement reached with your spouse is just and equitable.
The Agreement will, as far as the law permits, protect you from future financial claims by your spouse against property that you will retain according to the terms of the Agreement, or other property which you will acquire in the future.
Q. What are the disadvantages of entering into a Financial Agreement?
A. You are contracting out of your right to have the Court determine your entitlement to property settlement.
The Agreement can only be set aside in very limited circumstances pursuant to the provisions of the Act.
There is no scrutiny of the Agreement by the Court (i.e. to ensure it is just and equitable).
There is no process for registering the Agreement with the Court. If you need to enforce the Agreement you must first apply to the Court for a declaration that the Agreement is valid and enforceable; and
The Agreement has the potential to be set aside if either of you were to challenge it and the Court would then have the power to decide your property settlement and spouse maintenance claim.
We hope this information is helpful. Contact us for your own advice by phoning (07) 3221 4300 for a fixed-cost ($330 inc. GST) no obligation 1 hour appointment with a family law expert. We can meet with you in person, by phone or on SKYPE.