Financial agreements in family law are an important aspect of divorce and separation. Couples tend to overlook this aspect since they built their relationship on trust and compromise. They could all think to themselves "I can trust my partner with my finances since we love each other".
Just a quick disclaimer! We don't mean to urge couples not to trust each other with their money. However, we would like to state the additional security they can have with a financial agreement. 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 it to court. Read on to learn more about financial agreements
We will also highlight relevant sections of the Family Law Act 1975 that talk about financial agreements.
Which Is Better? Prenuptial or Postnuptial Agreements?
Financial agreements made before marriage are prenuptial agreements. On the other hand, financial agreements made after a marriage are post-nuptial agreements.
Both of these agreements are important and provide a way for couples to settle their finances before and after divorce. As we said, these agreements help secure a couple's assets and finances. They won't have to go through lengthy court battles if both of them agree on what they own and what their partner owns.
Section 90A: Relevant Definitions of Financial Agreements in Family Law
The Family Law Act has a lot of legal jargon that most people may not comprehend or translate. That's why we're here to simplify things for you!
Section 90A of the Act starts us off with definitions like 'dealt with' and 'marriage' in financial agreements in family law . 'Dealt with' has the meaning defined in Section 90F (2). While 'marriage' also includes a void marriage.
Which Is Better? Prenuptial or Postnuptial Agreements?
Financial agreements made before marriage are prenuptial agreements. On the other hand, financial agreements made after a marriage are post-nuptial agreements.
Both of these agreements are important and provide a way for couples to settle their finances before and after divorce. As we said, these agreements help secure a couple's assets and finances. They won't have to go through lengthy court battles if both of them agree on what they own and what their partner owns.
Section 90A: Relevant Definitions of Financial Agreements
The Family Law Act has a lot of legal jargon that most people may not comprehend or translate. That's why we're here to simplify things for you!
Section 90A of the Act starts us off with definitions like 'dealt with' and 'marriage' in financial agreements in family law . 'Dealt with' has the meaning defined in Section90F (2). While 'marriage' also includes a void marriage.
Section 90B: Financial Agreements in Family Law Before Marriage
Did you know you can apply for financial agreements before marriage? There are relevant factors that prove that an agreement is a financial agreement before marriage. This is if:
1. People who are contemplating entering into a marriage make a written agreement for 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. If spouses want to make a financial agreement before marriage, they should not be a party to any marriage.
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. This will only apply if all of the parties to the previous agreement are parties to the new agreement.
Section 90C: Financial Agreements in Family Law During Marriage
There are relevant factors that prove that financial agreement is legalduring 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.
Section 90D: Financial Agreements After Divorce
Financial agreements 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 are 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 about 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 had forgotten the date of separation and immediately opted to make a financial agreement for property settlement purposes. In this case, they will agree to a postnuptial agreement.
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.
Additionally, they are still living together even after the separation. Can they still get a divorce and a financial agreement? Yes, but how?
We Can Help Save Your Assets and Finances!
In our example, Becky and Bruce found themselves in a bind because they remembered that they didn't meet the requirements of separation. However, even if they were living together they can still prove that they have done things separately since the breakup.
But this is just one example. Out of all the messy breakup stories about divorce, ex-partners can only imagine how to proceed with their divorce.
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. Regardless of the type of divorce, we can help draft binding financial agreements, whether they are postnuptial or prenuptial.
Contact us today for more information about financial agreements in family law matters.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
