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Binding financial agreements explained
Requirements for a binding financial agreement
- For your binding financial agreement to be legally binding, which means that you and your partner must honour it, there are several things that you must have done. You and your partner must have:
- Agreed to the terms and signed the agreement;
- Received independent legal and financial advice before signing so you understand your rights and the pros and cons of the agreement; and
- Received a statement from your lawyer confirming that they gave you advice and gave a copy of this to your partner.
Why do I need a lawyer?
A financial agreement will not be binding unless you and your partner have received independent legal advice. This ensures that you both understand what the agreement means and how it will impact you in the future.
It can be tricky to have open conversations about money when emotions are involved. A family lawyer can help you negotiate an arrangement and draft the agreement so the process is as quick and painless as possible.
Why MNG Lawyers
Frequently Asked Questions
As you have both agreed on how your assets will be divided, you will not need to go to court to finalise your financial arrangements. But you may still need to go to court if you have children together and need to determine their custody arrangements.
If you are in a de facto relationship or marriage and live in Australia, you can have a financial agreement.
A marriage is registered in your state or territory. While a de facto relationship means you have a “genuine domestic relationship” and:
- Have been living together for at least two years; or
- Have a child together; or
- It would be unjust to not recognise your partner’s financial or non-financial contributions.
A financial agreement can be made during your relationship or after you have separated. If you have already ended your relationship, you must make a financial agreement within 12 months of being divorced or within two years of ending your de facto relationship.
A financial agreement can cover:
- How you will separate your finances, including superannuation;
- How you will separate your property; and
- What financial support (like maintenance) will be paid.
A financial agreement does not cover your children or any arrangements for them.
Yes, a court may refuse to uphold your agreement for several reasons including:
- If one or both of you were not honest about all the assets and liabilities that you had at the time the agreement was made;
- The agreement was signed under duress or threat;
- If one of you made the agreement to avoid paying someone else, like a creditor or an ex-partner;
- It’s no longer practical for any part of the agreement to be carried out;
- If, since the agreement was made, your circumstances have changed regarding the care, welfare and development of one of your children and it may cause one of you to suffer hardship; or
- A superannuation asset in the agreement is not able to be divided.
If the court doesn’t hold up the agreement, then either of you can ask them to determine how your assets should be divided.
If you don’t have a binding financial agreement you may need to go to court and ask them for a family law consent order to determine how your assets should be divided.