Anyone entering into a marriage or de facto relationship in
Australia may wish to draw up a legal agreement detailing how
property and financial resources will be divided in the event of a
divorce or relationship breakdown. This is referred to as a binding
financial agreement in Australia although many refer to it as a
separation agreement or a pre- or post-nuptial agreement. No matter
what this agreement is called, as long as it is valid and
enforceable, the court may use it to divide assets according to the
wishes of the parties involved. What are the benefits of having an
agreement of this type?
When you establish a binding financial agreement, you remain in
control of your assets and decide which party gets which items. The
emotional and financial costs of the legal proceedings are greatly
reduced and you can begin to move forward with your new life.
Communication between former partners improves with the use of a
financial agreement and your relationship as parents, if this
situation applies, often works better. The best time to come to a
financial agreement is when you are still acting as a couple so you
can make rational decisions. Emotions are less likely to come into
play when this is the case.
How do you go about setting up a binding financial agreement in
Australia? Certain conditions must be met to ensure the contract is
valid and enforceable. Both parties must seek independent legal
advice from different legal practitioners before the agreement is
signed. The legal practitioners are required to explain how entering
into the agreement will affect the right of each party and outline
the advantages and disadvantages of an agreement of this type. A
signed statement must be provided by the legal practitioner stating
that the advice was given and this statement must be shared with the
legal advisor for the other party. In addition, any spousal
maintenance to be provided must be laid out in the document. The
financial agreement in Australia must be written and signed by both
parties.
Certain situations will make a binding financial agreement in
Australia invalid and unenforceable. Fraud is one situation. If
either party has failed to disclose a 'material matter', the contract
can be set aside by the court. The same is true if the agreement has
been entered into for a fraudulent purpose. If there is a material
change in circumstances, the court may set the contract aside and the
same is true if some terms are voidable, void or unenforceable. Other
situations may occur that make the contract invalid.
Never enter into a binding financial agreement without following
these steps. When you do so, the court will likely set the agreement
aside as if it never existed. Work with legal council to have an
agreement drafted. When you do so, you can save yourself a great deal
of time and frustration in the event the relationship does not last.
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