A binding financial agreement is a contract between two people that deals with how property is divided following a relationship break down. These agreements are intended to avoid both parties from having to go to court following a separation. Under certain circumstances, it is possible to challenge a binding financial agreement. Melbourne Law Studio explores these circumstances below.
Binding Financial Agreement vs Consent Order
A binding financial agreement is distinct from a consent order. While the former is a civil contract between two people, the latter is a written agreement between separated spouses that gets approved by the Family Court. Unlike binding financial agreements, a consent order covers parenting issues as well as financial ones.
Drafting a Binding Financial Agreement
Binding financial agreements are a formal way for two people to agree on how their assets and liabilities, including property, superannuation and so on, will be divided if a separation is put into effect. These agreements can be drafted during any stage of a relationship.
While you can find a financial agreement template online, it is best to seek assistance from a family lawyer as you are entering into a contract that may compromise the ability of a family court to make decisions that contradict its terms.
When Can a Binding Financial Agreement Be Challenged?
The Family Law Act sets out strict requirements for what each party needs to disclose and how the agreement should be drafted. The agreement may be challenged if:
- There is evidence that one party fraudulently entered into the agreement or did not disclose any particular assets and/or liabilities
- One or both of the parties acted unscrupulously when entering into the agreement
- It provides for a superannuation interest that cannot be split
- It was made solely to defraud a creditor or was made with reckless disregard to a creditor’s interest
- There has been a change in circumstances that makes it impracticable to enforce
- It’s unenforceable, void, or voidable under law
- Changes in circumstances have occurred relating to the care, welfare and development of a child of the relationship that would result in hardship if the court does not set the agreement aside
If you think a binding financial agreement into which you have entered or are contemplating entering is unlawful, unfair or has been drafted using an improper financial agreement template, you should seek legal advice to determine your next steps.
Get Advice from a Melbourne Family Lawyer
Got more questions about dividing property or any other legal issues following a divorce? A Melbourne family lawyer can help. Book your free 15-minute consultation today with Melbourne Law Studio to find out more. Call us on 03 9021 1421 or contact us online.
