Spouses can make binding financial agreements that cover maintenance during or after marriage

After a divorce, you can make an agreement with your former spouse concerning the division of your property. You can also agree that one former spouse should pay maintenance to the other. If you want your financial agreement to be binding, you must take certain steps.

Contents of agreement

Section 90D of the Family Law Act 1975 requires a court to enforce certain agreements made between spouses after a divorce. The court will enforce agreements that that address these issues:

• How property and financial resources that were acquired during the marriage are to be divided.
• The maintenance of either spouse.
• Other issues that are related to property or maintenance.

Parents of children can also make parenting and child support agreements after a divorce, but those are covered by different sections of the Family Law Act.

Legal effect of a binding financial agreement

Financial agreements made after a divorce can be made binding on the court and on the parties if certain legal requirements are followed. “Binding” means that the court will enforce the agreement under most circumstances, even if the court has concerns about whether the agreement is fair.

Courts have limited authority to set aside binding financial agreements rather than enforcing them, but it is very difficult to meet the legal standard that must be satisfied before the court will set aside an agreement. An alternative to a binding financial agreement is to apply for a consent order, but courts have greater authority to reject that application than they have to set aside a binding financial agreement.

Legal requirements for a binding financial agreement

Strict requirements must be followed to make a financial agreement binding. They include:

 The agreement must be in writing.

• The agreement must be signed by both parties.
• The agreement must contain a statement in which both parties acknowledge that they received independent legal advice before entering into the agreement.

Certificates must be provided to each party confirming that the party received independent legal advice.

The agreement remains binding on the parties unless and until it is set aside or terminated by a court order.

Independent legal advice

The legal advice required to make the agreement binding must be provided by a practicing lawyer. The same lawyer cannot advise both spouses. The advice must explain the effect of the agreement on the rights of the spouse as well as the advantages and disadvantages of entering into the agreement.