Why a financial agreement might become void without you knowing11-June-2019 Family Law By admin
Both married and de facto couples can contract out of going to Court if their relationship breaks down by way of a private legal deed. These Agreements are sometimes referred to as Pre-Nuptial Agreements, Financial Agreements, or Binding Financial Agreements (‘BFA’).
The Family Law Act 1975 (“the Act”) has separate provisions for married and de facto relationship Agreements and again for the different stages at which an Agreement can be made; but the effect is similar.
For married couples, Financial Agreements can be made before marriage (pursuant to section 90B of the Act), during marriage (pursuant to section 90C of the Act), or after divorce (pursuant to section 90D of the Act).
For de facto couples, Financial Agreements can be made before a de facto relationship (pursuant to section 90UB of the Act), during a de facto relationship (pursuant to section 90UC of the Act), and after separation (pursuant to section 90UD of the Act).
By entering into a Financial Agreement, the parties agree to contract out of the provisions of the Act that would otherwise determine the division of their asset pool in the event of the breakdown of their relationship. This includes dealing with the parties’ property, including superannuation, and even the financial support or maintenance of one party by the other.
Financial Agreements are complex documents which must be prepared according to the strict requirements set out by the Act, to be binding. There are also many rules which can cause an Agreement to have no effect or be automatically terminated. For example, an Agreement entered into before marriage must be made in anticipation of marriage otherwise the Agreement has no effect; and an Agreement entered whilst you are a party to a de facto relationship automatically terminates upon your marriage to that person.
A Financial Agreement is capable of being set aside by the Family Court of Australia in certain circumstances, some of which include:
- The Financial Agreement was obtained by fraud, for example the non-disclosure of a material matter by one party;
- The Financial Agreement is found to be void, voidable, or unenforceable. For example, the binding requirements were not fulfilled;
- Matters and circumstances have arisen since the Financial Agreement was made that make it impracticable for the Agreement or part of the Agreement to continue to be carried out;
- Since the Agreement was made a material change in circumstances that relate to the acre, welfare and development of a child of the relationship has occurred; or
- A party to the Financial Agreement engaged in unconscionable conduct in the process of developing the Financial Agreement. For example, demanding that the other party sign the Agreement on the parties’ wedding day.
The above grounds are detailed in Sections 90K and Sections 90UM of the Act.
If you feel a Financial Agreement is right for you, speak to one of our experienced Family Law team at Streeterlaw by calling 02 8197 0105 or using the below contact form and avoid making costly mistakes!