Services > Binding Financial Agreements
What is a binding financial agreement?
A binding financial agreement is a legally enforceable agreement between de facto partners or spouses that can agree on property division and spousal maintenance.
A binding financial agreement can be made when you are contemplating a de facto relationship or marriage (commonly known as a prenup or prenuptial agreement), while you are in a de facto relationship or marriage, or when you separate.
Why can’t we just simply agree between us?
It’s great if you can reach an agreement with your partner. You can do this either on your own, with the help of a lawyer, or by agreeing matters at a property mediation. However, for your agreement to be enforceable it needs to be made as a binding financial agreement. Alternatively, you can use your agreed items to apply to Court for consent orders. Consent orders formalise your written agreement into the form of court orders, and the Court gives their approval for the orders to be made.
If you merely agree matters between you informally, then there is a risk that a party may at a later stage, apply to a Court to reopen property and financial issues.
When can binding financial agreements be used?
To quarantine property in favour of a party (without the other party sharing in it);
To protect inheritances, gifts or family trust entitlements;
To specify who gets what upon separation;
To protect pre-relationship property from being shared;
To split superannuation; and/or
To specify any financial support that is to be paid upon separation (spousal maintenance).
Are binding financial agreements enforceable and legally binding?
Yes, if you meet the legal requirements under the Family Law Act 1975. You each need to:
Provide full disclosure of your assets and liabilities; and
Obtain separate legal advice, and each lawyer needs to advise on the advantages and disadvantages of the agreement and certify that they have done so.
When would an agreement not be binding & enforceable?
Where a party has not had independent advice from a lawyer;
Where a lawyer has not given advice on the agreement’s advantages and disadvantages;
If there has been unconscionable conduct, duress or undue influence (e.g., one party has placed significant pressure on the other spouse or party to sign the agreement);
If one party has not provided accurate and full information about assets and liabilities or has been fraudulent;
Where the agreement is unclear, uncertain or impractical to carry out;
Where the agreement is an attempt to split an unsplittable superannuation interest; or
Where there has been a material change of circumstances since the agreement was made, and it is materially unjust for the agreement to be enforced.
What is a material change of circumstances?
The relevant circumstances must relate to the care, welfare and development of a child of the marriage, and the Court must be satisfied that, as a result of the change, the child or, a party to the agreement will suffer hardship unless the Court sets aside the agreement.
If the Court finds such hardship, the agreement will be set aside or varied.
How can we help?
If you are considering making a binding financial agreement then we can advise on its terms, ensure that you comply with the provisions of the Family Law Act 1975, prepare an agreement for you and advise on whether the proposed agreement may be vulnerable to being set aside.
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