The term “prenuptial agreement” is generally well understood. It may be defined as a legal agreement between two parties entered into before their marriage that makes provision for their assets and financial resources in the event of a breakdown of the marriage.
The Family Law Act 1975(Cth) recognizes pre-nuptial agreements and makes specific provision for such agreements. While most people are aware of the concept of pre-nuptial agreements, many may be unaware that the same legislation makes provision for similar financial agreements to be entered into between spouses during the marriage or after separation.
Parties in ‘de facto’ relationships, same-sex relationships and ‘domestic relationships’ (which include, for example, a carer and the person they care for, whether they are related or not) may also enter into similar legal agreements before, during or after cohabitation under the Family Law Act.
The agreements entered into pursuant to the provisions of the Family Law Act are generally known as “financial agreements” or “binding financial agreements”.
Whenever parties to a relationship enter into such financial agreements, the intention is to make clear provision about their assets, financial resources and their future finances in the event that the relationship ends and to avoid the possibility of a dispute and/or litigation or to limit the scope of any possible dispute and/or litigation.
Where there has been a breakdown of a relationship, an existing financial agreement will operate to remove or limit the jurisdiction of the courts, whether it is the Family Court or the State or Territory Courts. The Courts will not have their usual powers to order a redistribution of assets of the relationship, or, if maintenance is dealt with in the financial agreement, to make orders as to maintenance payable to either party.
Can a financial agreement be set aside?
A court can declare the agreement invalid, and set it aside. The situations in which that is possible are provided at Section 90K (married couples) and Section 90UM (de facto couples) of the Family Law Act.
In order for a financial agreement to be binding in Australia, it is compulsory that both parties seek independent legal advice…
Entering into a financial agreement is an action that may have a momentous effect on one’s future. In Australia, in order for a financial agreement to be binding, it is compulsory that both parties seek independent legal advice, detailing the effect of the agreement on the rights of the party, and the advantages and disadvantages to the party of making the agreement.
It is important to obtain legal advice to ensure that your rights are adequately protected when entering into a financial agreement, and that the technical and general legal requirements are complied with. We at elringtons are experienced in providing advice regarding financial agreements and in drafting such agreements. Please contact our office for further information regarding financial agreements and other family law matters.
For more information or to make an appointment in either our Canberra or Queanbeyan office please contact the Family Law Team:
p: (02) 6206 1300 | e: cturini@elringtons.com.au
