Binding Financial Agreement
Swanwick Murray Roche – Rockhampton & CQ Family Lawyers and Solicitors
What is a binding financial agreement?
A binding financial agreement is an agreement that married and de facto couples can enter into to deal with how couples can divide their property and superannuation in the event of a separation or after separation has occurred. A private financial agreement does not need the review of the Court.
Financial agreements can be entered into:
- Before marriage (also known as pre-nuptial agreements);
- Before living together;
- During marriage or during the de facto relationship;
- After separation; or
- After divorce.
Financial Agreements are very technical documents and can only be completed with solicitor involvement. Our family law solicitors are able to assist you with preparing a binding financial agreement. A binding financial agreement prevents a party who has signed the binding financial agreement from bringing an application to the Court in relation to spouse maintenance.
Financial Agreements FAQs
Q. Can a Financial Agreement be set aside, terminated or cease to be binding?
A. Yes it can. Generally, a binding financial agreement is binding. However, an agreement can be set aside in circumstances including:
- Fraud (dishonesty)
- The logistics of the agreement are impractical to implement,
- There has been a major change concerning the care and welfare of children;
- One party to the agreement acted in an unconscionable (unethical) way;
- Where the parties agree to set aside the Financial Agreement;
- Where the parties agree to change the Financial Agreement and enter into a new Financial Agreement;
- Where the parties to the Financial Agreement were de facto spouses and who subsequently marry, the Financial Agreement will be set aside;
You should not enter into an Agreement hoping that later on you may be able to have it set aside or terminated. You should only enter into a binding financial agreement after you have received legal and financial advice and properly considered your position.
Q. Can people enter a Financial Agreement even if they don’t live together?
A. Yes, a Financial Agreement can be entered into before a couple live together to provide for the circumstances of their separation and how they would divide their property following separation.
Q. What terms should be included in your Financial Agreement?
A. Deciding on the terms to be included in your Agreement is largely up to you and the other party. Terms that need to be included to ensure the Agreement is binding include a complete schedule of all the assets, liabilities and superannuation of the parties.
You will need to consider a range of issues particularly to your personal circumstances and your family law solicitor can assist you with negotiating appropriate terms to include in a binding financial agreement.
Q. What are the advantages associated with entering a Financial Agreement?
- The Agreement offers certainty of the finalisation of property settlement matters and you will avoid the considerable time, costs and risk in litigating the matter in Court.
- There is no requirement that the settlement reached with your spouse is just and equitable.
- The Agreement will, as far as the law permits, protect you from future financial claims by your spouse against property that you will retain according to the terms of the Agreement, or other property which you will acquire in the future.
Q. What are the disadvantages of entering into a Financial Agreement?
- You are contracting out of your right to have the Court determine your entitlement to property settlement.
- The Agreement can only be set aside in very limited circumstances pursuant to the provisions of the Act.
- There is no scrutiny of the Agreement by the Court (i.e. to ensure it is just and equitable).
- There is no process for registering the Agreement with the Court. If you need to enforce the Agreement you must first apply to the Court for a declaration that the Agreement is valid and enforceable; and
- The Agreement has the potential to be set aside if either of you were to challenge it and the Court would then have the power to decide your property settlement and spouse maintenance claim.
Resources
Check out some of our recent legal updates and property resources that you might find useful on this Family Law Resources link. Please remember that these updates and resources are general guidance only. If you need legal advice, you should contact us to discuss your matter as your personal circumstances may not suit the circumstances described in the updates and resources.
During family law legal matters, many issues come up that require the support of experienced social support works and other professionals. Here are some links to support resources that may help you (please ensure that you make yourself familiar with any confidentiality rules or seek advice from us).
Relationship support:
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