Property settlements in NSW are governed by the Family Law Act 1975 and involve the legal division of assets and the provision of spousal maintenance. The core complication is that the legal validity of a settlement often depends on strict drafting requirements, particularly regarding how maintenance is expressed.
Ante-nuptial and post-nuptial settlements
The court has the power under section 85A to make orders it considers just and equitable regarding property dealt with in ante-nuptial or post-nuptial settlements. In practice, this means prior arrangements made about property may be reopened and reviewed unless they are already included in a formal financial agreement.
Spousal maintenance orders
When a court orders a lump sum or property transfer for maintenance, it must express the order as one to which section 318 applies and specify the exact value attributable to maintenance. If the order fails to include these specifics, the payment is legally taken not to make provision for the maintenance of a party.
Maintenance in legal agreements
Under section 354, a private agreement must explicitly state that it is an agreement to which that section applies and comply with specific requirements to be recognized as maintenance. Without this precise language, the agreement will not be treated as providing for the maintenance of a spouse or child.
Enforcing the settlement
The law recognizes several mechanisms to ensure a settlement is honored, including court-enforceable agreements, bonds, and undertakings accepted by the court under section 296. Utilizing these specific instruments provides a direct pathway to court enforcement if the other party fails to comply with the settlement terms.
The drafting gap
The most significant difficulty in these settlements is the risk of technical non-compliance. A minor omission in how a maintenance provision is worded under section 318 or section 354 can entirely change the legal character of a payment, potentially stripping a party of their intended maintenance protections.
Questions to consider
- Does my current agreement explicitly state it complies with the legislative requirements for spousal maintenance?
- Are there ante-nuptial or post-nuptial settlements in place that could be challenged under section 85A?
- Which court-enforceable instrument is the most secure way to ensure the transfer of assets is completed?
This information is general in nature and does not constitute legal
advice. For advice specific to your situation, contact JB Solicitors.