Some of the financial arrangements which couples have entered into since binding financial agreements – sometimes referred to as ‘pre-nups’ – became available under Australia’s family laws are under a cloud following recent court decisions.
While the intention of the law was to allow people to organise their affairs as they saw fit, the courts are concerned that the effect of the binding financial agreement can be to oust the court’s power to make over-riding property adjustment orders. The Family Court has therefore taken a very strict approach in interpreting the requirements to make such arrangements.
Both parties will need to receive independent legal advice from a solicitor with a certificate attesting to that, and both must sign a financial agreement for it to be binding.
Documenting the agreement has to follow strict rules. In one particular case, the court said that there has to be one original, signed by both parties, and a copy. To have two copies, each signed by one party and exchange, did not comply with the law. In this case, the agreement was found invalid and could not be enforced.
Make sure you obtain written advice from a solicitor in advance of signing a binding financial agreement. The body of the agreement must contain a statement about the advice given.
Furthermore, you cannot make last-minute handwritten amendments to the agreement. If you wish to seek any type of amendment to the agreement you must seek legal advice first. It is better to incorporate changes into the document and then have everyone sign. Any handwritten amendments can lead to the suggestion that the agreement has been altered after the legal advice has been given.
Contact us to find out more or to arrange a consultation with an experienced lawyer in Sydney CBD.
Reproduced with the permission of the Law Society of New South Wales.