A Financial Agreement is more than a document. It is a legal instrument that can significantly affect future property, financial and maintenance rights if it is legally binding.
Unlike consent orders, a Financial Agreement allows parties to make their own financial arrangements without the Court determining whether those arrangements are just and equitable. Because of that, the legislative requirements governing Financial Agreements are strict and careful preparation is essential.
Because of the potential consequences, Financial Agreements require careful consideration, complete disclosure, precise drafting and independent legal advice directed to the particular circumstances of each party.
Financial Agreements commonly involve
- An explanation of each party's circumstances
- The reason for entering into the agreement
- Financial disclosure and asset identification
- Property division, financial risk management and asset protection
- Superannuation and complex asset structures
- Spousal maintenance considerations
- Independent legal advice requirements
- Enforceability and reducing the risk of future challenge
Binding and Enforceable Financial Agreements
To be legally binding, the Financial Agreement must meet specific legislative requirements. These requirements are in place to ensure that the agreement complies with the law and to protect the parties' rights.
Financial Agreements should be entered into freely and voluntarily. Circumstances involving undue influence, duress, unconscionable conduct or inadequate disclosure may affect the validity or enforceability of an agreement.
Each party must receive independent legal advice about the effect of the agreement on their rights and the advantages and disadvantages of entering into it. Compliance with these statutory requirements is essential if the agreement is intended to be legally binding.
The value of a Financial Agreement depends not only on what it says, but on whether it has been carefully prepared, complies with the legislative requirements and appropriately reflects the parties' circumstances while reducing the risk of future challenge.
Moving forward
Whether you are considering a Financial Agreement before entering a relationship, during a relationship or after separation, early advice can help clarify whether an agreement is appropriate and what issues need to be addressed.
A carefully prepared Financial Agreement can provide certainty, reduce future disputes and help both parties move forward with greater confidence.
This material is general in nature and is not a substitute for tailored legal advice.