What is a financial agreement?
A financial agreement is an agreement between parties to a marriage or de facto relationship about their financial arrangements. Sometimes people refer to these agreements as ‘prenuptial agreements’, but the correct legal term is ‘financial agreements’.
What can a financial agreement cover?
Financial agreements can cover anything concerning your finances, assets, property (including the transfer or sale of a property), superannuation, spousal maintenance and child maintenance.
A financial agreement cannot deal with any non-financial matters relating to children, for example, arrangements to spend time with your child.
When can I enter into a financial agreement?
A financial agreement can be made before, during or after a marriage or de facto relationship.
Who can make a financial agreement?
Married spouses, same-sex partners and people in a de facto relationship can all enter into a financial agreement.
When is a financial agreement legally binding?
To make the agreement valid, the parties need to:
- receive independent legal and financial advice; and
- sign the agreement.
There is an additional requirement for people in a de facto relationship, which is that they must be ordinarily resident in any of the following states when the financial agreement is made: New South Wales, Victoria, Queensland, South Australia, Tasmania, the Australian Capital Territory, the Northern Territory or Norfolk Island.
Why should I bother?
Parties enter financial agreements for several reasons.
If the agreement is made before moving in together or getting married or during the relationship, it is usually because the parties want to clearly understand what will happen to their assets and finances if the relationship breaks down.
If the agreement is made after the relationship, it is usually an alternative to litigation. In these circumstances, parties want certainty and peace of mind and don’t want a judge to decide on their financial circumstance.
A financial agreement can also save you time and money instead of taking the matter to court. They can be less stressful and easier to manage than litigation by avoiding protracted negotiation and allowing you to get on with your life.
Fourtree Lawyers can advise you whether you should have a financial agreement, your financial exposure without one and your options. If you are in a relationship, you should consider a financial agreement, and especially more so if you own property or other assets, or you are likely to receive an inheritance or have a good earning capacity.
How is a financial agreement made?
Once the financial agreement has been negotiated, the parties have received independent legal and financial advice and they sign the agreement, it is legally binding.
The parties can also file ‘consent orders’ at court. This means the parties agree to the terms of the financial agreement and want the court to validate or formalise the agreement. Once consent orders are made, the financial agreement is a court order, making it the same as the outcome of a family law trial.
My partner isn’t complying with our financial agreement, what can I do?
Fourtree Lawyers can negotiate with your partner to enforce the agreement. If your partner does not comply, we can advise you on your options, which may include issuing a court proceeding.
I want to get rid of my financial agreement, what can I do?
If you and your partner both agree, you can change or invalidate (set aside) your financial agreement.
If your partner disagrees, you can apply to the court to invalidate your agreement for several reasons.
Examples of reasons to invalidate a financial agreement include:
- one party entered the agreement intending to defraud the other, or by influencing or misleading them;
- if the agreement was entered into by fraud- that is, one party failed to disclose their assets or circumstances during negotiations;
- the agreement was entered into in order to escape creditors;
- the agreement has become impractical to enforce (for example, if the agreement provides that one party is granted ownership of a property and that property was sold);
- a material change in the parties’ circumstances means that a child will suffer hardship (for example, if a child of a relationship suffers an injury and one party requires more money to care for the child);
- if there is a problem with superannuation (for example, the agreement provides for a superannuation interest that cannot be divided);
- the agreement is not enforceable based on contract law (for example, due to duress); or
- the Court finds that it would not be fair, in the circumstances of the case, to allow the agreement to stand.
Why Fourtree Lawyers?
Financial agreements are technical legal documents and you should seek proper advice about your options before you consider one. The agreement should be negotiated and drafted by an experienced lawyer. Fourtree Lawyers are here to help you in an efficient and effective manner with any financial agreement, no matter your financial circumstances. We can approach your partner with proposed terms, negotiate for you, provide you with clear and concise advice and formalize the agreement.
We can also refer you to our wide network of financial advisors for tailored financial advice on the terms of the agreement.
If the agreement is negotiated after the breakdown of your relationship and agreed terms could not be reached, Fourtree Lawyers will give you practical advice about your options, including whether you should take the matter to court.
If you have signed a financial agreement that you are unsure about or if you wish to enter into a financial agreement, contact Fourtree Lawyers for a consultation with one of our experienced Family Law Lawyers.
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