Financial agreements in family law are agreements made for financial matters in divorce or separation. This document sets out how couples will divide their assets and finances after a divorce. Couples may use a financial agreement before, during or after their relationship has ended. Either of the following parties may apply for a financial agreement:
- Married couples. These are couples legally bound by marriage.
- De facto couples. De facto couples are couples who domestically live under one roof, and are having sexual relations, but are not married. Courts will recognise a de facto relationship if it has lasted for at least 2 years.
- Same-sex couples. Same-sex marriage has been legal in Australia since December 9, 2017.
Financial agreements in family law allow couples to finally move on while walking away with what’s rightfully theirs. While divorce is a trying time for everyone involved, it’s better to prepare well to prevent matters from escalating to courts. Read on to know more about financial agreements and relevant sections of the Family Law Act 1975.
Section 90A: Relevant Definitions of Financial Agreements
Section 90A of the Act provides definitions like ‘dealt with’ and ‘marriage’ in financial agreements family law. ‘Dealt with‘ has the meaning defined in Section 90F(2). While ‘marriage’ also includes a void marriage. Section 90F(2) states that a provision relating to property or financial resources in a certain agreement pertains to how it will be dealt with in that agreement only. Some of these agreements are set out in the following sections below.
1. 90B: Financial Agreements Family Law Before Marriage
There are relevant factors that prove that an agreement is a financial agreement. This is if:
1. People who are contemplating entering into a marriage make a written agreement with respect to matters like:
- How to deal with all or any property or financial resources of either or both of the spouse parties at the time when the agreement was made, or at a later time and before divorce, in the event of a marriage breakdown.
- The maintenance of either spouse parties during the marriage, after divorce, or both during the marriage and after divorce.
2. The people are not the spouse parties to any binding agreement at the time of the making of the agreement
3. The agreement is made under Section 90B.
A financial agreement may also contain matters incidental or ancillary to those mentioned in number 1 and other matters. New financial agreements made as mentioned in number 1 under this section may terminate a previous financial agreement if all of the parties to the previous agreement are parties to the new agreement.
2. 90C: Financial Agreements Family Law During Marriage
There are relevant factors that prove that an agreement is a financial agreement when discussing financial agreements during marriage. Similar to Section 90B, an agreement is a financial agreement if:
1. People who are contemplating entering into a marriage make a written agreement with respect to matters like:
- How to deal with all or any property or financial resources of either or both of the spouse parties at the time when the agreement was made, or at a later time and before divorce, in the event of a marriage breakdown.
- The maintenance of either spouse parties during the marriage, after divorce, or both during the marriage and after divorce.
2. The people are not the spouse parties to any binding agreement at the time of the making of the agreement
3. The agreement is made under Section 90C.
To avoid doubt, couples may make a financial agreement under Section 90C before or after a marriage breakdown.
Similar to Section 90B, a financial agreement may also contain matters incidental or ancillary to those mentioned in number 1 under this section and other matters apply to this section. New financial agreements made as mentioned in 1 may terminate a previous financial agreement if all of the parties to the previous agreement are parties to the new agreement.
3. Section 90D: Financial Agreements Family Law After Making a Divorce Order
There are relevant factors that prove that an agreement is a financial agreement when discussing financial agreements after making a divorce order. This is if:
1. The divorced couple make a written agreement after the making of a divorce order with respect to any matters like:
- How to deal with all or any property or financial resources of either or both of the divorced couple had or acquired during their marriage
- The maintenance of either of the divorced couple
Similar to Sections 90A and 90B, a financial agreement may also contain matters incidental or ancillary to those mentioned in number 1 under this section and other matters apply to this section. New financial agreements made as mentioned in 1 may terminate a previous financial agreement if all of the parties to the previous agreement are parties to the new agreement.
Section 90DA: Effect of Declaring Separation In Financial Agreements
According to Section 90DA(1), there is a need to declare separation in order to execute certain provisions of financial agreements in family law. If not, a binding financial agreement that deals with how all or any property or financial resources is of no force or effect. This is the case even if the agreement was binding:
- At the time the agreement was made; or
- At a later time and before the termination of a marriage through divorce
Section 90DA(1) ceases to apply if the spouse divorces or if either or both of them pass away. This results in the financial agreement being in force and effect in relation to matters mentioned in 90DA(1). A separation declaration is a written declaration that is included in a financial agreement and will require a:
- A signature from at least one of the parties in the financial agreement
- Statement that the spouse parties have separated and are living apart at the declaration time. The declaration time refers to the time when a party to the financial agreement signed the separation declaration.
- Statement that there is no reasonable likelihood of resuming cohabitation (living together).
A financial agreement will have force and effect in relation to the other matters it addresses before the separation declaration is made, except for any matters covered in Section 90DB. Separation is a vital part of identifying divorce since this is evidence of a relationship breakdown.
Declaration of Separation Example
For instance, Becky and Bruce have been married for 5 years but have decided to divorce. However, they have forgotten the date of separation and immediately opted to make a financial agreement for property settlement purposes. Upon applying for financial agreements, the application contains a part where it requires them to confirm whether:
- They have separated and are living separately for at least 12 months
- There is no reasonable likelihood of living together again
Obviously, they could not complete the form since they forgot when they separated. They checked their message history and found messages that proved their separation which was 9 months ago. This is just 3 months short of the required 12 months. Moreover, they remember living together even after they separated. Can they still get a divorce and a financial agreement? Yes, but how?
Importance of Seeking Legal Advice
In our example, Becky and Bruce found themselves in a bind because they remember that they didn’t meet the requirements of separation. However, even if they were living together they can still prove that they were separated. As long as they have established strict physical, sexual, and financial boundaries they can wait for another 3 months to complete their separation period.
JB Solicitors can not only help with financial agreements in family law matters but also help with separation matters. We value the need to divide the finances and assets of divorcing couples since this will give them peace of mind. Our team’s mediation and arbitration services can help disputed couples handle financial matters amicably. We can also help with drafting binding financial agreements.
Contact us today for more information about financial agreements in family law matters.
