more couples are entering into binding financial agreements
A binding financial agreement is similar to a contract between the parties. Its role is to determine what happens to property if a relationship fails. Binding financial agreements might also make allowances for the payment of spousal maintenance if a relationship ends.
This agreement can be drawn up, during or after a marriage or de facto relationship. It is only possible to set aside binding financial agreements in restricted circumstances. To prepare and activate a binding financial agreement legal advice should be sought so that any agreement is unlikely to cause a dispute.
If an individual has considerable assets to protect, it is a good idea to have a binding financial agreement, because if it is valid the courts have no jurisdiction when it comes to the distribution of property in a family breakdown.
A binding financial agreement can be produced before a marriage or cohabitation takes place, when marriage or cohabitation has commenced and following a divorce or de facto relationship breakdown.
Binding financial agreements are designed to distribute money and assets if a relationship breaks down. They can cover maintenance issues as well as property and money issues, but not matters relating to parenting.
A binding financial agreement that is valid can eliminate the court’s capability to hand out orders with regards to distributing assets or resources. These can otherwise be done under Family Law Act (the Act). Additionally a binding financial agreement can remove the paying of maintenance to the other person.
- In order for a financial agreement to be binding it must be
- in writing bearing the signatures of all parties;
- legal advice regarding the impact of the binding financial agreement must be sought and the appointed lawyer should attach a signed statement saying all parties had received appropriate legal advice;
- the agreement is not brought to an end or set aside;
- all parties should be in possession of a copy of the agreement.
It is possible to vary an agreement if the circumstances of those involved have altered.
The court is not usually involved in binding financial agreements unless
- fraud was used to obtain the agreement;
- the purpose of the agreement was to defraud a creditor;
- defrauding some other person was a reason for establishing a financial agreement;
- alterations in the holder’s situation make the agreement impossible to enforce;
- a child features in circumstances and unless the agreement is set aside the child will suffer hardship and it would result in hardship for the child or the other party if the agreement is not set aside;
- one of the parties acted unethically.
Disclaimer : This article provides basic information only and is not a substitute for a professional or legal advice. It is prudent to obtain legal advice from a family lawyer.