A Financial Agreement made between the members of a marriage or de facto relationship is binding by law. The Court will not interfere with how the Agreement divides the property and assets between the parties, and for this reason, it can be a prudent device for asset protection when drafted properly. However, for members of a marriage or de facto relationship seeking to divide assets that are protected by a Financial Agreement, it is possible to challenge the compliance of the Agreement.
Challenging the Compliance of a Financial Agreement
In order for a Financial Agreement to be upheld, it must comply with the requirements of the Family Law Act. If it does not comply with Family Law, the Court will set the Agreement aside, as the Court did on the application of a client we acted for in a recent matter. As our client was successful, she was then entitled to seek Orders for a division of the assets that would have been protected if the agreement had been enforceable.
Some errors that could result in a Financial Agreement being set aside include:
- Failure to fully disclose assets;
- Failure to provide the legal advice required under the Family Law Act;
- Failure by the lawyer to spend the time and attention needed to draft the terms of the agreement to ensure the terms are clear and enforceable; and
- Failure by the lawyer to ensure the terms of the agreement cover all present and future assets.
Ensuring Asset Protection
Although a Financial Agreement might cost a member of a marriage or de facto relationship a minimal amount in legal fees, it can result in costly litigation for that party who after a hearing may have to divide his/her assets with his/her ex-partner when the agreement should have protected those assets from a division.
The Commonwealth Parliament has recently introduced amendments aimed to reduce some of the strict legal requirements for Agreements. However, unless a Financial Agreement is drafted to ensure its terms are effective in protecting the assets and future assets of the party seeking the protection, the lessening of the strict legal requirements for Agreements will not assist that party.
At Antunes, our family lawyers in Sydney do not compromise your protection as we are focused on ensuring your Financial Agreement provides you with asset protection if your marriage or de facto relationship fails.
Contact our expert team of family lawyers Kathy Chase, Sara Alamyar or Margaret Antunes, to discuss how a Financial Agreement can protect your assets after a separation. Call our family lawyers in Sydney on 02 9964 0499 to ensure your assets are fully and effectively protected today.