14/09/2016, 09:35:AM
14/09/2016, 09:35:AM
Ending a Relationship Financial Agreement!
In today’s society where forever means not so... financial agreements are a good contract to have between a couple. The financial agreement can be made at the beginning, during or end of the relationship. The thing is though, sometimes what is agreed too at a certain time, is not really reflective what should have taken place as the accepted circumstance between the parties.
So how do you get out of a relationship financial agreement?
Financial agreements can either be terminated by the parties mutually under the Family Law Act 1975 (Cth) by entering into a written termination agreement, or having the agreement set aside by the court under the Act where it is void, voidable or unenforceable.
Where there is a later financial agreement which has a clause that terminates an earlier agreement, this will terminate that first agreement, if there is no act of fraud with the second agreement and proper independent legal advice is obtained.
Sounds tricky….? Then that’s why you need a lawyer!
The termination agreement needs to be carefully drafted, and each party must obtain independent legal advice, which that advice should be followed up in writing before a party signs that termination agreement, which demonstrates the advantages and disadvantages of the termination, which then allows that party to make an informed decision on all the consequences of terminating the financial agreement.
However, when one party wants to keep enforce the financial agreement and the other party wants out, the onus of proving that the agreement is valid and should be held usually rests on the party seeking the protection of the agreement. Though if it is the other party that wants out of the agreement, they have to demonstrate that the agreement is invalid in some form or another. This is not an easy task either way and requires the skill and diligence of a lawyer to forensically analyse the circumstance.
All financial agreements when they are entered into require that before a party signs that document they obtain independent legal advice, and then confirmation of that advice needs to be issued by a solicitor’s certificate. Though in good practice, the solicitor that provides a party a certificate, should also present to that party a detailed letter of advice explaining the pros and cons of that agreement. Because if there is a dispute at a later time about the agreement, that letter of advice may be a very key point to support your case.
Once a financial agreement is terminated, it allows either party to seek orders under the Family Law Act 1975 (Cth) in relation to seeking a new financial arrangement between the parties. So as example, if under the financial agreement a party were only entitled to the family pet and $100,000, and then after the termination of the financial agreement, and subject to the circumstance, a party could apply to the court that orders of a greater split of the financial assets occur, such as $500,000 and the family pet instead of the smaller amount. Whatever the situation may be, if orders are sought by the court, the court will make orders that are just and equitable to the circumstance. Though keep in mind, this may not get what the party wants either, as it all depends on the facts of the situation.
Relationship dynamics change with time, and it is a good step to consider having a financial agreement between the parties to protect each other’s future. So do it right from the start, get that legal advice to protect your legal rights & interests.
The comments in the aforementioned do not constitute legal advice and are general in nature, and if legal advice is required please contact: John Melis at Legal AU Pty Ltd (03) 9999 7799
Legal AU Pty Ltd Lawyers are “Liability limited by a Scheme approved under Professional Standards Legislation.”
