In Australia, a “prenuptial agreement” is called a “Binding Financial Agreement” or simply a “Financial Agreement”. In either case, it is a written contract that can, amongst other things, protect a person’s assets from their spouse or de facto spouse. These Agreements can be entered into by parties before, during or after a divorce or the breakdown of a de facto relationship. When creating a Financial Agreement, there are requirements that need to be met for the Agreement to be valid. The provisions of the Family Law Act (1975) (Cth) (the Act) which permit Financial Agreements are very complex.
What can Financial Agreements cover?
Financial Agreements deal with how property and finances are distributed in the event of a relationship coming to an end. These Agreements can also cover maintenance payments and superannuation but cannot deal with parenting matters.
Generally, a valid Financial Agreement prevents the Court from making orders for the adjustment of a separated couple’s assets or resources.
What are the requirements for creating an enforceable Financial Agreement?
For a financial agreement to become binding and enforceable, the following formal requirements must be met:
- the Agreement is in writing and signed by all parties;
- before signing the Agreement, the parties are to be provided with independent legal advice. This is usually proved by attaching to the Agreement a signed statement by each parties’ legal practitioner certifying that independent legal advice was provided (to each party separately from the other);
- the Agreement has not been terminated or set-aside by the Court; and
- all parties must have a copy of the Agreement. Usually one party retains the original and the other a copy of the original Agreement.
When can a Financial Agreement be set aside by the Court?
Although a Financial Agreement usually overrides the Court’s jurisdiction to make orders for property adjustment, the Court can set an Agreement aside in certain circumstances, including where the Agreement:
- was obtained by fraud or unconscionable conduct, or with the purpose of defrauding others (for example, creditors of both or either party);
- is unenforceable;
- has become impractical to enforce due to a change of circumstances; and
- would result in hardship to a child, or hardship as a result of the birth of a child of the relationship.
If a Financial Agreement is invalid or set aside by the Court, then the Court has jurisdiction to adjust the parties’ assets and resources pursuant to the Act.
Financial Agreements involve many technical legal aspects therefore it is essential that a person who is considering entering into a Financial Agreement, varying an Agreement, or wishing to set aside and Agreement, seek legal advice from an Australian Family Lawyer. Craddock Murray Neumann’s family lawyers are able to provide that advice on all aspects of a Financial Agreements. Please contact our Family Law team for more information.
The law is complex and changes frequently. The law may have changed since publication of this article.