Published: 21 April 2024
Why you should get a pre-nuptial agreement.
Contemplating marriage
Two people who are contemplating marriage and would like to set out how their property and financial resources will be divided in the event of a breakdown of that marriage can enter into an agreement under s 90B of the Family Law Act 1975 (Cth) (FLA). This agreement is commonly known as a “pre-nuptial agreement”, however that terminology does not exist with the FLA so it is more appropriate to refer to these agreements as financial agreements.
How will the agreement become binding?
Section 90G sets out when a financial agreement, including s 90B agreement is binding, namely when:
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- All parties have signed the agreement.
- Before signing, each party was provided with independent legal advice about the effect of the agreement and its advantages and disadvantages.
- The solicitor provided each party with a signed certificate stating they had received legal advice and this certificate was provided to the other party.
- A court has not terminated or set aside the agreement.
All financial agreements must comply with these requirements whether they are in a married or de facto relationship.
A financial agreement is different to a de facto agreement
There are variations in the wording of the sections as applied to a de facto and married agreements. A financial agreement under s 90B of the FLA states that this agreement is not effective until the parties are married and the marriage beaks down.
Whereas a de factor agreement under s 90UJ of the FLA would cease to be effective once the parties marry.
What is the purpose of a financial agreement and what the contents should reflect
The purpose of a financial agreement is to set out the rights and entitlements of the parties on breakdown of the relationship in order to reduce the likelihood of future litigation. Under s 90B(3), FLA such an agreement may deal with the distribution of the financial resources and property of the parties as well as any other related incidental or ancillary matters. At the time of making the agreement, a party may not be a spouse party to any other binding agreement.
A financial agreement may also deal with:
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- superannuation;
- care and maintenance of children of the relationship;
- child/spousal maintenance during or after the marriage;
- loss of employment/income;
- bankruptcy of a party;
- future windfalls/inheritances; or
- other incidental issues such as death of a party; mediation of a dispute before commencing proceedings.
- the agreement was obtained by fraud (including non-disclosure of a material matter).