Financial Agreement Post Relationship/Post Separation
How you and your husband/wife deal with your assets after you separate is referred to as a “property settlement” and how you and your husband/wife deal with meeting your week to week living expenses after you separate is referred to as “spousal maintenance”.
If you and your husband/wife separate then you do not need to go to Court to work out what happens with your assets, debts, superannuation and how your future financial needs will be met. You and your husband/wife can reach an agreement about property settlement or spousal maintenance. If this happens then it is important for the arrangement to be properly formalised to enable both of you to move on with your lives. One way that an agreement about property settlement or spousal maintenance can be formalised is through the use of a Financial Agreement that is binding. These agreements are commonly referred to as Binding Financial Agreements.
A Binding Financial Agreement is a contract between you and your husband/wife that provides:
- that neither you or your husband/wife will take the other to Court asking for an order about property settlement or spousal maintenance; and
- Details about how your assets will be divided or spousal maintenance is to be paid to you or your husband/wife.
There are very strict requirements for a Binding Financial Agreement to be valid. These requirements are:
- That the agreement is in writing;
- That the agreement is signed by you and your husband/wife;
- That before you and your husband/wife sign the agreement, you each must have received independent legal advice from a lawyer who practices in Australia about the advantages and disadvantages of you signing the agreement and how it affects yours and you husband/wife’s legal rights;
- That you and your husband each receive a signed statement from your respective lawyers that you have each received the required advice before the agreement was signed;
- That a copy of the signed statement of legal advice received by you is provided to your husband/wife or his/her lawyer;
- That a copy of the signed statement of legal advice received by your husband/wife is provided to you or your lawyer;
- That the agreement has not been terminated by you and your husband/wife or set aside by the Court.
If any of the above requirements are not followed then there is a risk that the agreement that you and your husband/wife signed will not stop either of you asking the Court to make an order about property settlement or spousal maintenance in the future.
Once a Binding Financial Agreement is entered into by you and your husband/wife then they cannot be changed and can only be brought to an end by you and your husband/wife signing a termination agreement or the Court setting it aside. Setting aside a financial agreement is very difficult to do if all the requirements have been followed.
The advantages of a Binding Financial Agreement is that you and your husband/wife can negotiate and have your own input about how your respective financial affairs will be dealt with. This usually saves you and your husband/wife on legal costs associated with Court proceedings and the emotional cost that is often involved with a dispute about property settlement or spousal maintenance.
We have qualified and expert family lawyers who can advise and guide you about how to negotiate and finalise a Binding Financial Agreement if you and your husband/wife have separated.
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?