This article will tackle the other provisions of financial agreements under the Family Law Act 1975. When two people enter into a de facto relationship or marriage, they often make plans for the future. They may discuss what would happen to their property and finances if they were to separate. Sometimes, they may even enter into a written agreement about these matters.
In Australia, these agreements are “financial agreements.” Sections 90UF to 90UJ of the Family Law Act 1975 are concerned with the binding effect of financial agreements. A financial agreement is a written agreement between two people who are in a de facto relationship or are married. The agreement is about how they will divorce their property and finances if they separate.
Other Provisions About Financial Agreements: Section 90UF & 90UG
Is There a Need for a Separation Declaration for a Financial Agreement to Take Effect?
Section 90UF of the Act stipulates the following:
- instances of the need for separation declarations for certain provisions of financial agreement to take effect; and
- requirements for a valid separation declaration.
What Is A Separation Declaration?
A separation declaration is a written declaration that complies with Section 90XP of the Family Law Act 1975. It may be included in the superannuation agreement to which it relates. Moreover, at least one of the spouses must sign the declaration. The spouse’s legal personal representative may sign the declaration if a spouse has died.
What Must the Separation Declaration State?
The declaration must state that:
- the spouse parties lived in a de facto relationship; and
- the spouse parties have separated and are living separately and apart at the declaration time (the time when the declaration was signed by a spouse party to the financial agreement); and
- in the opinion of the spouse parties making the declaration, there is no reasonable likelihood of cohabitation being resumed.
According to Section 90UF, until parties make a separation declaration, a financial agreement binding on the people who made it has no force or effect. This is because it deals with how all or some of the property or financial resources of either or both spouse parties
- at the time they made the agreement or
- at a later time and during the de facto relationship
are to be handled if the de facto relationship ends. However, this rule ceases to take effect if both spouse parties die.
Section 90UG also states that a financial agreement binding on both parties as long as it covers matters listed in the provisions on financial agreements before, during, or after de facto relationships has no force or effect until the de facto relationship ends.
Other Provisions About Financial Agreements: Section 90UH
Requirements With Respect to Provisions in Financial Agreements Relating to the Maintenance of a Party or a Child or Children
What are the requirements for financial agreements relating to the maintenance of a party or a child to be valid? Section 90UH provides that a provision in the agreement should specify:
- the party, or the child or children, for whose maintenance provision is made; and
- the amount provided for, or the value of, the portion of the relevant property attributable to, the maintenance of the party, or of the child or each child, as the case may be.
Other Provisions About Financial Agreements: Section 90UI
Rules under Section 90UI:
- No provision of a financial agreement excludes or limits the power of a court to make an order in relation to the maintenance of a party to the agreement if the court is satisfied that, when the agreement came into effect, the circumstances of the party were such that, taking into account the terms and effect of the agreement, the party was unable to support himself or herself without an income tested pension, allowance or benefit.
- To avoid doubt, a provision in a financial agreement made as described in the provisions:
- de facto financial agreements or
- those agreements made in non-referring States become financial agreements
that says property or financial resources owned by a spouse party to the agreement will stay in the ownership of that party is taken to be a provision about how the property or financial resources are to be divided.
Other Provisions About Financial Agreements: Section 90UJ
When Are Financial Agreements Binding?
Section 90UJ of the Act lays out the conditions as to when financial agreements are binding. The conditions are as follows:
- The parties sign the agreement.
- Before signing the agreement, a legal practitioner provides each spouse party with independent legal advice about the effect of the agreement on the rights of that party and about the advantages and disadvantages.
- Either before or after signing the agreement, the legal practitioner provides each spouse party with a signed statement stating that the advice was provided to that party.
- A copy of the statement that was provided to a spouse party is given to the other spouse party or a legal practitioner for the other spouse party.
- The agreement has not been terminated or set aside by a court.
Moreover, this section also states that a financial agreement may still be binding, although:
- A legal practitioner was not able to provide independent legal advice to the parties
- A signed statement stating that such advice was provided to the parties was not provided.
- A copy of that statement was not provided to the parties.
Provided that these conditions exist:
- The parties sign the agreement.
- The court is satisfied that the agreement would be unjust and inequitable if not binding on the spouse parties.
- The court makes an order declaring that the agreement is binding on the parties to the agreement.
- The court does not terminate or set aside the agreement.
If a financial agreement is binding, a court may make orders for its enforcement. This means that the court can order one party to the agreement to do something, such as pay money to the other party or transfer property to the other party.
Contact a Family Lawyer for Advice
Lawyers can help in financial agreements under the Family Law Act 1975 in a number of ways, including:
- Explaining the law. Lawyers can explain the legal requirements for financial agreements under the Family Law Act 1975. This includes the need for independent legal advice, the need for the agreement to be fair and reasonable, and the circumstances in which court can set aside an agreement.
- Negotiating terms. Lawyers can help couples negotiate the terms of a financial agreement. This includes discussing the couple’s assets, debts, and financial needs and coming to a fair agreement for both parties.
- Drafting the agreement. Lawyers can draft the financial agreement in a clear and concise way. The agreement should be specific, unambiguous, and in line with the couple’s negotiations.
- Providing independent legal advice. Lawyers must provide independent legal advice to each party to a financial agreement. This means that the lawyer cannot represent both parties to the agreement. The lawyer must advise each party about the terms of the agreement and the implications of entering into the agreement.
- Enforcing the agreement. If one party to a financial agreement fails to comply with the terms of the agreement, the other party can take legal action to enforce the agreement. Lawyers can help enforce financial agreements by filing court applications or taking other legal steps.
If you are considering entering into a financial agreement, it is essential to consult a competent lawyer who is an expert in family law. Our family lawyers at JB Solicitors can help you understand your rights and options and negotiate and draft a fair financial agreement that protects your interests.
Submit an enquiry today.
