This article provides a comprehensive guide on financial agreements after the dissolution of a marriage or relationship under Australian law.

The dissolution of a marriage or a de facto relationship can be a challenging and emotionally draining experience for all parties involved. One of the most critical aspects of this process is sorting out the financial matters. A financial agreement is a way for parties to agree on how their assets, financial resources, and debts will be divided without the need for court intervention.

What is a Financial Agreement?

A financial agreement is a legally binding contract between two parties that sets out how their assets, financial resources, and debts will be divided upon separation or divorce. These agreements can be made before, during, or after a marriage or de facto relationship. They are sometimes referred to as 'prenuptial agreements,' 'postnuptial agreements,' or 'binding financial agreements.'

Benefits of a Financial Agreement

1. Autonomy: Parties have the autonomy to decide on the division of their assets, financial resources, and debts without the court's intervention.
2. Certainty: It provides certainty and clarity about the financial arrangements upon separation or divorce.
3. Cost-effective: It can be a cost-effective way to resolve financial matters as it avoids the need for lengthy and expensive court proceedings.
4. Privacy: The details of the financial agreement remain private between the parties and are not made public, unlike court orders.

Legal Requirements for a Valid Financial Agreement

For a financial agreement to be legally binding under Australian law, it must meet the following requirements:

1. It must be in writing.
2. It must be signed by both parties.
3. It must contain a statement that both parties have received independent legal advice regarding the agreement's effect on their rights and the advantages and disadvantages of entering into the agreement.
4. A certificate from a legal practitioner confirming that such advice was given must be attached to the agreement.
5. It must not have been terminated or set aside by a court.

It is essential to ensure that the agreement meets all these requirements; otherwise, it may not be legally binding.

Setting Aside a Financial Agreement

While the purpose of a financial agreement is to provide certainty and avoid court intervention, there are certain circumstances where a court may set aside a financial agreement, including:

1. If there was fraud, duress, or undue influence when the agreement was made.
2. If there has been a material change in circumstances relating to the care of a child that would cause hardship to the child or a party.
3. If the agreement is impracticable to be carried out.
4. If a party engaged in unconscionable conduct when the agreement was made.
5. If the agreement is void, voidable, or unenforceable under the general principles of contract law.

Conclusion

Financial agreements can be a valuable tool for parties to resolve their financial matters upon the dissolution of a marriage or relationship. However, they must be carefully drafted and meet all legal requirements to be legally binding. It is highly advisable to seek independent legal advice when entering into a financial agreement to ensure that your rights are protected and the agreement is enforceable. If you believe that a financial agreement should be set aside, it is crucial to seek legal advice as soon as possible, as this is a complex area of law.