Property Settlement
6. Financial Agreements
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 22 Sep 2015
- A financial agreement is an agreement that is made between two people about property and financial matters. You and your ex-partner can make this agreement instead of having to go to court to have a Federal Circuit Judge make the decisions for you.
- To make a financial agreement binding each party must get independent legal advice before signing the agreement. This means each of you need to see a different lawyer and get them to explain how the agreement will work in a legal sense and whether the law would consider the agreement to be fair.
- A binding financial agreement can be made at any time during a relationship.
- You can sign a financial agreement once you have separated as a way to divide up your property.
- Financial agreements can also be prepared for couples in contemplation of a relationship such as a pre-nuptial agreement.
- A financial agreement can also be made at any other time during a relationship. For example if your husband gets an inheritance from his grandmother a binding financial agreement could state that you have no claim on that property if the relationship breaks down. A husband and wife could agree that neither will make a claim on each other’s superannuation. You could agree that your wife will get a larger percentage of your combined asset pool because of the interruption to her career while raising young children or that each of you will receive specific assets which have special meaning to you. There is no one-size fits all approach to binding financial agreements.
- It is a good idea to have the help of an expert lawyer when drafting the terms of your agreement to make sure it says what you want it to say in a legal sense. You may be sure that each of you understands what the agreement you wrote together means now. However making sure you have used the right words becomes very important if the relationship breaks down and you want to enforce your agreement.
- The court can enforce a binding financial agreement. After your application is approved it becomes an order of the court just like consent orders.
- If you do not get independent legal advice or have your agreement approved by the court you will have a financial agreement which is enforceable under contract law. The court’s powers and the available remedies are different than those available for breach of a court order.
- It is a good idea to discuss this difference with your lawyer to find out exactly what this means in your case.
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