Parties wishing to document how their finances will be divided in the event that they separate at some point down the track, can enter into what is known as a Financial Agreement. In fact, a Financial Agreement can be entered into at any point before or during marriage or cohabitation.
One of the more appealing features of this type of Financial Agreement is that it can cover property of the parties that has not yet been acquired or come into existence.
However, there are a number of very strict requirements that must be met by the agreement in order for it to be considered binding. For example, both parties must have independent legal advice on the effect of the agreement, the advantages and disadvantages of entering the agreement and their likely entitlements under the Family Law Act 1975. This must be done before the agreement can be signed and in order for the agreement to become binding.
A Financial Agreement that is not binding does not remove the jurisdiction of the Court to make property adjustment Orders and only can be relied upon as evidence of the parties' intention to do so. Further, a Financial Agreement that is not binding will not likely result in a division of property in accordance with its terms.
It is therefore extremely important that both parties comply with the requirements strictly before they intend to rely on any part of the agreement.
Financial Agreements should only be prepared by Accredited Specialists in Family Law.