Financial Agreements Lawyers Sydney
Everything About Financial Agreements
Fans of celebrity gossip are probably aware of the concept of a ‘pre-nuptial’ agreement. At one stage it seemed like every other famous couple signed a ‘pre-nup’ before they exchanged vows, the agreement setting out what would happen regarding their finances and ‘who gets what’ if and when there is a relationship later break down.
Pre-nups also exist in Australia but the concept is more regularly referred to as a ‘Binding Financial Agreement’ (BFAs). Moreover, such an agreement between partners regarding their financial matters can be made before (a pre-nup), during, or at the time of the breakdown of their relationship.
These agreements can be made either between married or de facto partners. The important thing to know is that if properly made, these financial agreements are legally binding on both partners if the relationship breaks down.
How do you make a BFA?
Such agreements are basically contracts between partners dealing with financial matters arising from the relationship. As with legal contracts, proper legal assistance and guidance is required in drafting and signing such an agreement and in order to make sure it’s later enforceable should the relationship break down.
These agreements are not filed with the Court or approved by a Registrar or a Judge, and the things you include in your agreement may deal with matters that a Court may not otherwise order. But of course, if there is later disagreement about the agreement, it will be up to a Court to decide whether it is valid and enforceable, i.e. binding.
In some BFA cases that have come before the Courts, the agreements have been ruled as invalid for reasons including:
- Duress (one party felt compelled to sign the agreement due to threatened or actual unlawful conduct that is illegitimate or unlawful);
- Undue influence involves one party having their free will overborne by the other party i.e. an influence over the mind which means that an act is not a ‘free act’.
- Unconscionable conduct requires one party to have a ‘special disadvantage’ which means that they are “unable to make a judgement as to his or her own best interests” and for the other party to unconscionably take advantage of that.
- Fraud – (i.e. through a failure to disclose assets or liabilities at the time the agreement was made).
- Since the making of the agreement, a material change in circumstances has occurred (being circumstances relating to the care, welfare and development of a child of the marriage).
- Lack of independent legal advice or inadequate legal advice;
- Poorly prepared and executed agreements;
- Failure to comply with legislation.
The last point means that a financial agreement must conform with the requirements of sections 90G and 90UJ of the Family Law Act 1975, including the requirement that both people in the relationship seek independent legal advice on the agreement and its implications.
You can still make an agreement at the end of the relationship?
One way to legally document an agreement made when a relationship is at its end is to apply to the Court for consent orders. This agreement could cover property settlement, parenting orders and other matters. In order for a property settlement that is consented to by the parties to be formalised, it must be considered just and equitable by the Court.
Why is legal advice so important?
As we have mentioned, it is a requirement that each party to a BFA seek independent legal advice about the making of the agreement. While you can find DIY agreements on the Internet, the risk is high that you will make an invalid agreement that will not be binding when you later need it.
Letting one of our experienced Sydney family lawyers help you will ensure your agreement will be binding and comply with the relevant legislation.
One of our experienced legal professionals can also assist if your Agreement is needing to be changed in a substantial way and where the law is very complex about whether the Agreement needs to be terminated and a new one entered into in order to make it binding.
Further, one of our experienced legal professionals can also assist to provide advice and representation if you need to enforce an Agreement that the other party is not complying with.
BFAs can be a very effective and proactive way to avoid unnecessary conflict and dispute either at the start of a relationship or during or when a relationship later breaks down, and where it is always best to get the details of the agreement right from the outset.
At Ivy Law Group we are committed to sharing useful information regularly. We understand for some people the importance of getting some context around your legal issue before engaging legal help!