For about the last 14 years, Australian Family Law Courts have recognised agreements about what is to happen with married couples' property in the event of marriage breakdown.
Since March 2009 this has extended to Family Law Courts who have also recognised these agreements for couples in de facto relationships including same sex couples.
These "Financial Agreements" can be entered into in contemplation of marriage or a de facto relationship, during a marriage or de facto relationship or following separation effectively allowing couples to "contract out" of the law otherwise applicable to property settlements. There are formal requirements and safeguards which must be adhered to. These include that the Agreement is in writing, signed by both parties and that both parties have separate independent legal advice in relation to the effects of the Agreement upon their rights and the advantages and disadvantages of entering into the Agreement.
So, will a valid agreement protect you if your relationship ends and the other party is unhappy with the terms of the agreement?
If a valid Agreement is in place, there are grounds on which a party can seek to set aside the Agreement if they no longer wish to be bound by it. These grounds include where one party has failed to disclose a significant asset or liability which, had the other party known about, they would not have entered into the Agreement. Other grounds include where there is evidence that the Agreement was entered into to defeat a claim by a third party creditor or where the Agreement would otherwise be made void due to principles of Contract Law.
Perhaps the broadest ground is the one that provides for the Agreement to be set aside where there has been a material change in circumstances in relation to the care arrangements of a child of the relationship.
Even if you have a valid agreement, there are risks that a court might set it aside.
Are these agreements always useful?
These Agreements are most useful for parties in subsequent relationships where one or both parties bring to the relationship significant assets or resources which they wish to protect from a Family Law claim, particularly where there are children from a previous relationship.
These Financial Agreements are of course not for everyone, particularly those couples who do not wish to contemplate their relationship ending. They can however be a very useful tool in order to create financial certainty which may reduce any tension or uncertainty in the relationship or the wider family. Anyone considering whether a Binding Financial Agreement would suit their circumstances should discuss this with an experienced Family Lawyer.