Binding financial agreements.
An agreement about property and money, made before, during or after a relationship.
A financial agreement is a contract made under the Family Law Act 1975.
It sets out how property and finances will be dealt with if the relationship ends.
If it is binding, it can keep those matters out of court.
It only binds you if strict requirements are met.
Before, during or after the relationship
- Before a marriage or de facto relationship.
- During the relationship, including after it has broken down.
- After a divorce, or after a de facto relationship ends.
An agreement can cover all of your finances or only some issues, such as maintenance.
The requirements
The Family Law Act sets out what is needed. In plain words:
- The agreement is signed by all parties.
- Before signing, each party receives independent legal advice about how the agreement affects their rights, and its advantages and disadvantages.
- Each party receives a signed statement from their lawyer confirming that advice was given.
- A copy of that statement is given to the other party or their lawyer.
The advice must come from an Australian legal practitioner.
In limited cases, a court can declare an agreement binding even though one of the advice steps was not met, if it would be unjust and inequitable not to.
Grounds for setting an agreement aside
A court can set aside a financial agreement only on grounds listed in the Act. In plain terms, these include:
- Fraud, including failing to disclose something material.
- The agreement was made to defeat creditors, or with reckless disregard for their interests.
- The agreement is void, voidable or unenforceable under ordinary contract law.
- It has become impracticable to carry out the agreement or part of it.
- Since the agreement was made, there has been a material change in circumstances about the care, welfare or development of a child, and a party or the child would suffer hardship.
- A party acted unconscionably in making the agreement.
- Certain superannuation problems, such as a payment flag that is unlikely to be lifted.
After you sign
Keep your signed original and your lawyer's signed statement in a safe place.
Tell someone you trust where it is kept.
You may need to produce the agreement and the advice statements many years later.
Where people get caught
Signing without independent advice
Each party needs their own lawyer. Without the advice and the signed statement, the agreement may not bind.
Not disclosing everything
Failing to disclose a material matter can be fraud, which is a ground for setting the agreement aside.
Signing under pressure
Unconscionable conduct in making the agreement is a ground for setting it aside.
Not reviewing it when children arrive
A material change in circumstances relating to a child can be a ground for setting it aside if hardship would result.
Losing the original
Proving the terms and the advice years later is harder without the signed documents.
Common questions
Does a financial agreement need to be filed with the court?
A financial agreement is a contract between the parties, not a court order. Ask us about the steps that apply to your agreement.
Can de facto couples make a financial agreement?
Yes. The Family Law Act provides for financial agreements before, during and after a de facto relationship.
Can one lawyer act for both of us?
No. Each party must receive independent legal advice.
Can a financial agreement deal with children?
A financial agreement deals with property, finances and maintenance. Arrangements for children are dealt with separately.
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