financial agreements

what are they?

Financial Agreements are written agreements which enable couples to decide outside out the court’s jurisdiction how their assets will be divided in the event of separation. Financial Agreement can also deal with spousal maintenance and child support.  

Financial Agreements entered into prior to marriage or commencement of a de facto relationships are commonly referred to as a “prenup”. The purpose of these agreements are to usually protect the parties’ assets and provide the parties with certainty and clarity as to what will occur when the parties separation. 

Financial Agreements are not limited to “prenups”. Financial Agreements can also be used to formalise agreements reached with respect to the division of property following separation. 

when can I enter into a Financial Agreement?

In relation to married couples, before marriage, during marriage, following separation and following divorce. 

In relation to de facto couples, before the commencement of a defacto relationship, during the defacto relationship and following separation. 

what are the requirements of a Financial Agreement?

In addition to the term “prenup”, Financial Agreements are also often referred to as “Binding Financial Agreement”. This is in circumstances where Financial Agreements are notorious for having a very rigorous set of requirements that must be complied with in order for the Financial Agreement to be binding. A Financial Agreement that is not binding has no utility and is otherwise likely to defeat the purpose of entering into one. These requirements for a Binding Financial Agreement are as follows:

  1. It must be in writing.

  2. It must correct state the relevant section of family law legislation.

  3. Each party must have had independent legal advice in relation to:

  • the effect of the agreement on the rights of that party;

  • at the time of entering into the agreement, the advantages and disadvantages of that party entering into the agreement; and

  • a statement of legal advice which is provided to the relevant party as well as to the other party. 

are there any other circumstances in which a Binding Financial Agreement will be set aside?

Even if a Financial Agreement is found to be “binding” pursuant to the above requirements, there are circumstances in which a Court may set aside the agreement. Some circumstances where a Financial Agreement can be set aside are as follows: 

  1. the Financial Agreement was obtained by fraud; 

  2. the purpose of the Financial Agreement was to defraud or defeat a creditor or the other party;

  3. a party was found to be under duress when entering into the Financial Agreement;

  4. a party to the Financial Agreement engaged in unconscionable behaviour;

  5. the terms of the Financial agreement are ambiguous;

  6. since the making of the agreement, there have been material changes involving the care, welfare and development of a child and the party who is responsible for the care of the child will suffer hardship if the agreement is not set aside; and 

  7. the agreement is void voidable or unenforceable.  

I think a Financial Agreement might be right for me, how do I go about getting one?

Financial Agreements require a high level of expertise to ensure they are binding and will not be set aside.  Pickering Pendleton is highly experienced in the preparation of Financial Agreements. Book in for a no obligation 15-minute free chat with us to see if a Financial Agreement will be right for you.