Binding Financial Agreements

Binding Financial Agreements
What is a binding financial agreement?
A binding financial agreement is a written
agreement between a married or de facto couple
about how their property and financial resources will
be dealt with if they separate.
An agreement can be entered into before marriage,
or, before you start living together. This type of
agreement is commonly referred to as a pre-nuptial
An agreement can also be entered into after a couple
have married or begun living together.
Some couples enter into a binding financial
agreement after they have separated or divorced
to record the terms of the property settlement that
they have agreed upon.
Do I need a binding financial agreement?
One of the main advantages of a binding financial
agreement is that it creates certainty in relation to
how your assets and liabilities will be divided should
you separate.
If, after separation you and your partner are unable
to agree on a division of property, this could give rise
to disagreements about contributions, the value of
assets and whether there should be compensatory
payments made for future needs.
It also means assets such as those owned before
the relationship commenced, or, inheritances or
gifts received by you during the relationship may be
included in the pool of assets to be divided, which
is an outcome you may not want, or, may not have
Disputes about property settlements can lead to
expensive and stressful litigation and is something
most couples would like to avoid. A binding financial
agreement can therefore assist you to avoid such a
Some of the advantages of a binding financial
agreement are:
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1. You can keep separate assets you owned before
the marriage, or, de facto relationship such as a
home, a business, assets in a Family Trust ,or, a
superannuation fund;
2. You can protect assets you may want to leave in
your Will to your children or grandchildren from
a previous relationship;
3. You can limit the amount of ongoing financial
support you may have to pay your spouse or
partner after separation;
4. You can provide for property inherited or gifted
to you to be kept separate.
Is a financial agreement really binding?
The following statutory requirements must be
complied with for an agreement to be binding:
1. The agreement is in writing and signed by all
2. Before signing the agreement each party
was provided with independent legal advice
from a legal practitioner as to the effect of
the agreement on their rights and about the
advantages and disadvantages of entering into
the agreement at that time;
Level 27, 12 Creek Street, Brisbane Qld 4000 GPO Box 245 Brisbane Qld 4001
P. +61 7 3231 8888 F. +61 7 3229 0855
Affiliated firms practising separately in Sydney • Melbourne • Brisbane • Adelaide
3.Each party received a signed statement from
their lawyer that the advice above was given,
and a copy of that statement has also been
given to the other party or their lawyer; and
4. The agreement has not been terminated or set
aside by a Court.
There are certain circumstances in which a Court
will set aside an agreement even though the
statutory formalities may have been complied
with. These circumstances can include fraud,
non-disclosure of a material matter or asset,
undue influence or pressure such as stating that a
wedding will not go ahead unless the agreement is
signed, or, a material change in circumstances such
as the birth of children.
How do I go about having an agreement
It is important that you contact a specialist family
lawyer such as the family law team at Thynne and
Macartney, who will be able to understand what
you want to achieve from your agreement and can
manage the process in a sensitive manner. Our aim
is to ensure your relationship is maintained and
improved by doing an agreement. We therefore
endeavour to work collaboratively with your
partner or spouse’s lawyer while also ensuring your
interests are protected.
writing it gives you time to digest it and to
make sure the agreement accurately reflects
your intentions.
This process can take some time to complete
so it is important if you are planning to move
in with your partner, or, to get married that
you contact us several months before the
event so we can prepare the agreement in
plenty of time. That way neither party feels
under pressure to sign the agreement.
Contact Us
If you would like further information about
binding financial agreements please contact:
Vanessa Leishman
Special Counsel
P: +61 7 3231 8708
Sarah Acton
P: +61 7 3231 8743
There is more to preparing a financial agreement
than just preparing a standard one size fits all
contract. We tailor the agreement to meet your
particular requirements and circumstances. To
ensure the validity of your agreement we need to
take detailed instructions from you. There must also
be full and frank disclosure as to each party’s assets,
liabilities and their values.
Sometimes this process can involve us working
with your accountant, financial planner or other
lawyers within our firm to ensure the terms of
the agreement align with any asset protection
structures you may have in place, and with your Will
and estate planning.
We will always provide you with written legal
advice about the effect of the agreement on your
rights, and the advantages and disadvantages
of entering into the agreement. It is important
that you fully understand the implications of the
financial agreement and by having this advice in
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Level 27, 12 Creek Street, Brisbane Qld 4000 GPO Box 245 Brisbane Qld 4001
P. +61 7 3231 8888 F. +61 7 3229 0855
Affiliated firms practising separately in Sydney • Melbourne • Brisbane • Adelaide