Is your binding financial agreement legally binding?

 

Binding Financial Agreement to be legally binding

There are certain requirements that must be adhered to for a Binding Financial Agreement to be legally binding. If these requirements are not adhered to, the Agreement may not be upheld in the future if challenged. Here are some things to consider:

Did you receive adequate legal advice?

In the decision of Hoult & Hoult [2013] FamCAFC 109, the parties entered into a Financial Agreement before they were married. The Judge ruled that the Agreement was not binding because the signed certificate of legal advice did not prove that the wife had received adequate advice, and the wife’s solicitor had not provided a written letter of advice, nor kept a written record of the advice which was given to the wife.

Did you disclose all your assets prior to entering the Agreement?

In Adame & Adame [2014] FCCA 42, the Agreement was not upheld on the basis the husband failed to disclose his real estate in the United States and certain bank accounts. Unsurprisingly, this failure was also deemed to be a misrepresentation.

Has your Agreement been made pursuant to the right Family Law section?

The Husband and Wife in Sullivan & Sullivan [2011] FamCA 752 entered into a section 90B Agreement four days after they married. A section 90B Agreement is for people who are contemplating marriage. Therefore, the Agreement should have been described as a section 90C Agreement, which is for parties to a marriage. The Court held that there was no Agreement.

Have your circumstances changed?

In the recent decision of Guild & Stasiuk [2020] FamCA 348, the parties entered into an Agreement prior to the wedding. The Wife sought to set aside the Agreement on the basis she had primary care of the children and that this was not anticipated at the time of making the Agreement. The Court ruled in the Wife’s favour stating this was a material change in circumstances and the mere fact that the Agreement contemplated the births of the children was not determinative.

If you are having doubts as to whether or not your Financial Agreement is binding, contact the Brisbane family lawyers team at James Noble Law to book a 20-minute free consultation.

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