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Binding Financial Agreements
See also De Facto Agreements
On 27 December 2000, Part VIIIA was introduced into the Family Law Act. This part deals specifically with "Financial Agreements" and provides for specific provisions for parties to enter into Financial Agreements, both before, during and after marriage. Such Agreements are now binding and enforceable. Such agreements are commonly referred to as either “Pre-nuptial” or “Post-nuptial” Agreements.
In order for a Financial Agreement to be binding under the Family Law Act, the Agreement must meet certain criteria set out in the legislation including:
- The Agreements must be signed by both parties;
- The Agreement must contain, in relation to each party, a statement to the effect that the party to whom the statement relates has been provided, before the Agreement was signed by him or her, with independent legal advice from a legal practitioner as to the following matters:
- The effect of the Agreement on the rights of both parties;
- Whether or not at that time when the advice was provided it was to the advantage financially or otherwise of that party to make the Agreement.
- The agreement contains a certificate signed by the person providing the independent legal advice stating that the advice was provided;
- The Agreement has not been set aside by a Court; and
- After the Agreement is signed the original Agreement is given to one of the parties and a copy is given to the other.
If the Agreement satisfies all of the above criteria, then it is known as a Binding Financial Agreement.
Binding Financial Agreements may deal with:
- All or any of the property or financial resources owned by either party;
- The maintenance to be paid by one spouse to the other after the marriage has ended;
- Other matters incidental to your financial affairs;
- The splitting of superannuation entitlements; and
- Contracting out of spousal maintenance.
A Court may make an Order setting aside a Binding Financial Agreement if, and only if, the Court is satisfied that:
- The Agreement was obtained by fraud (including non-disclosure of a material matter);
- The Agreement is void, voidable or unenforceable;
- If circumstances have arisen since the Agreement was made to make it impractical for the Agreement or part of the Agreement to be carried out;
- Since the making of the Agreement a material change in circumstance has occurred (being circumstances relating to the care, welfare and development of a child of the marriage) and as a result of the change, a party to the Agreement will suffer hardship if the Court does not set the Agreement aside; or
- In respect of the making of a Binding Financial Agreement, a party to the Agreement engaged in conduct that was in all the circumstances unconscionable.
Please note that one can terminate an Agreement at any time by entering into a formal termination agreement. A termination agreement must comply with the same formalities as a Binding Financial Agreement.
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