What are additional provisions for financial agreements under the Family Law Act 1975? Financial agreements outline the division of financial assets and liabilities of couples going through separation or divorce. This article is a continuation of our published article here. Financial agreements can cover various aspects which include:
1. Property division: In the case of separation or divorce, it is essential to specify how to divide the couple’s assets, such as:
- Real estate
- Bank accounts
- Investments; and
- Personal belongings
2. Debts and liabilities: This includes addressing how to allocate the following between divorced/separated parties:
- Mortgages; and
- Other financial obligations
3. Spousal maintenance: This type of financial aid is for ex-spouses who need financial support from their higher-earning ex-spouses.
4. Superannuation (pension): Superannuation is also an important factor during divorce. These are accumulated employment funds from one or both parties in a marriage or de facto relationship.
5. Financial matters related to children: Parties generally address financial matters regarding children separately. However, a financial agreement may include provisions for child support expenses, such as education, medical costs and other child’s needs.
Read on to learn more about additional provisions for financial agreements under the Family Law Act.
Section 90DB: Whether or When Certain Other Provisions of Financial Agreements Take Effect
Section 90DB about additional provisions for financial agreements states that:
1. A provision of a financial agreement has no force or effect if that provision:
- Binds the parties to the agreement; and
- Entails a third party contributing to the maintenance of a spouse party during the marriage.
2. A financial agreement that is binding on the parties, is of no force or effect unless and until the marriage breaks down. The extent of these matters is covered in paragraphs 90B(3)(b) or 90C(3)(b).
Section 90E: Requirements With Respect to Provisions in Financial Agreements Relating to the Maintenance of a Party or a Child or Children
This Section about additional provisions for financial agreements states that a provision under this section is void unless it specifies:
- The individual/s for whom the financial support is intended. It should specify the spouse party or the child or children who are meant to receive maintenance.
- The specific amount or value designated for the maintenance of the identified party or parties. It should clarify the monetary amount or the portion of property attributed to supporting the spouse party, child, or each child involved.
Section 90F: Certain Provisions in Agreements
Section 90F about additional provisions for financial agreements states that a financial agreement cannot restrict the court’s power to make an order for the maintenance of a party to a marriage. This is the case if subsection 1(a) applies.
1 (a) Specifically, the court can intervene if, at the time they made the agreement, the party was unable to support themselves without relying on:
- An income-tested pension
- Allowance; or
(2) Additionally, provisions in the agreement that allows a spouse to retain ownership of their property or financial resources are considered provisions regarding how those assets are to be handled.
Section 90G: When Financial Agreements Are Binding
Section 90G about additional provisions for financial agreements outlines the conditions under which a financial agreement is considered binding. Here is a summary of the provisions:
(1) A financial agreement is binding if:
- All parties have signed the agreement
- Each spouse has received independent legal advice about the agreement before they sign the agreement. The family lawyer or legal practitioner must have advised them about the agreement’s impact on their rights, advantages, and disadvantages.
- Each spouse has received a signed statement from their legal practitioner that has provided legal advice for them. A copy of this statement is also issued to each spouse.
- The court has not terminated or set aside the agreement.
(1A) However, according to Section 90G of additional provisions for financial agreements, a financial agreement is still binding if:
- All parties have signed the agreements
- One or more of the requirements in 90G (1)(b), (c), and (ca) have not been met.
- A court determines that it would be unjust and inequitable not to enforce the agreement. The court must also take into account the circumstances at the time of making the agreement.
- The court issues an order declaring the agreement to be binding.
- The agreement has not been terminated or set aside by a court.
(1B) A court can make an order declaring a financial agreement binding upon application by a spouse party seeking to enforce the agreement.
(1C) Section 90KA, which relates to the enforcement application, applies to this process.
(2) The court has the authority to issue any necessary orders to enforce a financial agreement that is binding on the parties.
Section 90H: Effect of Death of Party to Financial Agreement
Section 90H states that a financial agreement remains valid and enforceable even if one of the parties to the agreement dies. The agreement will continue to operate and remain effective in favour of and binding upon the legal personal representative of the deceased party.
Section 90J: Termination of Financial Agreement
Section 90J about additional provisions for financial agreements for termination. The parties to a financial agreement can terminate the agreement in two ways:
- Including a provision for termination in another financial agreement.
- Making a separate written agreement, known as a termination agreement. It must specifically state the termination of the financial agreement.
For a termination agreement to be binding on the parties, the following conditions must be met:
- a) All parties must sign the termination agreement.
- b) Before signing the agreement, each spouse party must receive independent legal advice from a legal practitioner. This is in relation to the agreement’s impact on their rights, as well as its advantages and disadvantages
- c) Each spouse party must be provided with a signed statement from their legal practitioner confirming that the advice mentioned in (b) was provided. This is the case whether or not the statement is attached to the agreement.
- (ca) A copy of the statement from (c) must be given to the other spouse party or their legal practitioner.
- d) The agreement must not have been set aside by a court.
Section 90J: Additional Provisions for Financial Agreements for Termination
(2A) A termination agreement can still be binding if:
- a) All parties sign the termination agreement.
- b) One or more of the requirements in (2)(b), (c), and (ca) have not been met.
- c) A court determines that it would be unjust and inequitable not to enforce the termination agreement. The court will take into account the circumstances at the time of making the agreement.
- d) The court issues an order declaring the termination agreement to be binding.
- e) The court has not set aside the agreement.
(2B) A court can make an order declaring a termination agreement binding upon application by a spouse party seeking to enforce the agreement.
(2C) Section 90KA, which relates to the enforcement application, applies to this process.
(3) A court has the authority, upon application by a party to the terminated financial agreement or any other interested person, to make orders to preserve or adjust the rights of the parties and interested persons involved in the agreement.
Seeking Legal Advice About Additional Provisions for Financial Agreements
In conclusion, when entering into financial agreements, it is necessary to have a clear understanding of the relevant provisions and legal requirements. This includes their definition, key provisions, division of superannuation, and termination.
Moreover, family law matters can be complex, and it is advisable to seek professional legal advice. JB Solicitors, an expert family law firm, can provide expert guidance and assistance in matters related to financial agreements. Our family lawyers ensure that your rights and interests are protected. We also provide mediation and arbitration services for family law matters.
Contact us today if you want to understand more additional provisions for financial agreements.