A financial agreement is a private legal agreement between married and de facto couples, where they have agreed to “contract out” of the provisions of the Family Law Act which would otherwise determine the division of property, financial resources and spousal maintenance in the event of the breakdown of a relationship.
A financial agreement can be entered into:
- Before marriage or before living together;
- During marriage or during the relationship;
- After separation or after divorce
A financial agreement entered into before or during a relationship or marriage (commonly known as ‘prenuptial agreements’) can allow couples to decide how they will divide their property and financial resources if they separate. The agreement can provide couples with certainty on property settlement matters, and can save significant time and costs on litigating property settlement in Court.
Separated couples can also enter into financial agreements to distribute their assets and financial resources, and the agreement can also finalise any spousal maintenance obligations between the parties.
Financial agreements are technical documents and there are strict requirements for the agreement to be valid and legally binding. There are limited circumstances under the Family Law Act in which a financial agreement may be set aside. Both parties must be independently legally represented, and legal advice certificates must be exchanged between the parties’ lawyers when a financial agreement is entered into.