Financial Agreement - In Contemplation of Marriage (ACT)
Often referred to as a ‘prenuptial agreement’, a Financial Agreement functions to protect assets owned by either party contemplating marriage both before saying “I do”.
A Financial Agreement in contemplation of marriage made under s 90B of the Family Law Act 1975 (Cth) is essentially a contract whereby each party agrees to divide their assets in a particular way, effectively deciding to “contract out” of the Act upon the breakdown of the marriage. Where parties to a marriage have entered into a Financial Agreement, and that agreement is binding, then neither person can bring a claim in the Family Law Courts (Family Court and Federal Circuit Court) for property adjustment Orders.
The Financial Agreement also deals with the maintenance of either spouse during the marriage and/or after divorce. This agreement protects the assets owned by each spouse personally and/or the family of each spouse, where there are substantial assets. It is intended that such assets be protected in the event the marriage ends.
According to s 90G of the Act, a Financial Agreement in contemplation of marriage is binding where:
*It has been signed by all parties to the Agreement;
*Before signing the Agreement each person sought independent legal advice about the effect of the Agreement on their rights and the disadvantages of entering into the Agreement;
*Each party was provided with a signed statement from their legal practitioner; and
*That statement has then been provided to the other party or their legal practitioner.
The reality of Financial Agreements is not like the movies.
Last-minute negotiations, threats to end the relationship and signing the Agreement on the church steps could all potentially lead to the Agreement being set aside by a Family Law Court. This is because the Agreement is not binding in circumstances of duress, undue influence and/or unconscionable conduct. The Agreement can also be set aside where:
Either party has knowingly or recklessly made a false statement concerning their circumstances, or has misrepresented them to the other person;
*The Agreement has been entered into for the purpose of defeating a claim by third party creditors; and
*The agreement is incomplete, uncertain or impracticable to carry out.
It is important to remember that a Financial Agreement of this type can be entered into at any time before the marriage. Alternatively, it is still possible to enter into a different type of Financial Agreement, both during the marriage and following divorce.
If you are concerned about protecting your assets before marriage, it might be a good idea to schedule an appointment with a family law solicitor from our team to receive tailored advice and assistance.
WHERE TO NEXT?
Taking the next step and contacting a family lawyer can be scary. Our lawyers will make you feel comfortable so you can talk about your situation. But first, ask yourself, Do I really need a lawyer?