A financial agreement is a written agreement between two or more people that complies with the Family Law Act 1975.
Financial agreements are signed before, during or upon separation with a spouse or partner. Financial agreements cover the following:
- Division of property, finances and debts after a marriage breakdown;
- Spousal maintenance
For financial agreements to be legally binding, both parties must have signed the agreement and have received independent legal and financial advice before signing.
The different types of financial agreements are:
- In contemplation of a marriage;
- In contemplation of a de facto relationship;
- During a marriage;
- During a de facto relationship;
- After separation from marriage;
- After separation from a de facto relationship.
Financial Agreements are intended to avoid the need for the parties to go to court in respect of property matters. A financial agreement will generally take away the right of a party to apply to the Court for a financial settlement.
Financial agreements in marriage and de facto cases entered into prior to the relationship, or during the relationship but before separation, are somewhat speculative in their nature. They are similar in character as to what are known commonly as ‘pre-nuptial agreements’. These types of financial agreements make provision for the financial settlement each party is to receive if they separate.
Financial agreements in marriage and de facto cases entered into following separation are more concrete in nature. A financial agreement is often used to formalise the final financial settlement that has been agreed upon.
Reasons that a court may set aside a financial agreement include:
- Creditor’s interests.
- Void or unenforceable due to mistake, misrepresentation, public policy, uncertainty, incompleteness, duress, undue influence, unconscionable conduct, breach, waiver, estoppel.
- If the financial agreement becomes impracticable due to a change in circumstances.
- Unconscionable conduct.