In our previous articles on this topic we discussed the often poorly understood financial agreement (often called a binding financial agreement or pre-nuptial) within family law matters and in particular:
- Some background about financial agreements
- When financial agreements might be useful at the start of a relationship
- What matters a financial agreement can cover
In part 3 we will discuss when a financial agreement may be set aside or terminated.
Financial Agreements – not invincible
In circumstances where a financial agreement is prepared with the advice of experienced family lawyers there should not be any impediment to the parties’ agreement being given effect.
However, a financial agreement can be set aside by Courts exercising jurisdiction under the Family Law Act if:
- There is evidence of fraud. This could include where one party is found to have hidden assets to exclude them from the agreement.
- The agreement was created to defraud a creditor. That is, move assets from one party to another to escape creditors.
- The agreement is resulting in hardship to one of the parties or children of one of the parties.
- The agreement is void or unenforceable on the basis of some legal principle including public policy, misrepresentation, duress, breach of the agreement or unconscionable conduct.
- The agreement is no longer practical because of a change of circumstances.
- The agreement is not able to be implemented as agreed. For example, a superannuation interest may not be able to be divided up as the parties wished.
Can you agree to terminate a financial agreement?
The short answer is yes! Provided the parties both agree, they can terminate a financial agreement, and that such termination is in writing and satisfies the same conditions as those involved in creating the initial agreement. These are set out in Part 2 of this article but primarily involve ensuring both parties have received the appropriate legal advice.
A financial agreement can also be terminated by the parties by agreeing to a new agreement. This may be particularly relevant if circumstances change.
If you have any questions about financial agreements for yourself or in relation to a client you are advising, please contact a member of our family law team for more information.
In our next family law article we will be discussing Consent Orders and, in part, how they can be alternative to binding financial agreements.