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Entering Into A Financial Agreement? Don’t Get Sold Short!

KEY POINTS FOR ENTERING INTO FINANCIAL AGREEMENTS Some helpful advice if you are considering entering into a Financial Agreement. Financial Agreements under the Family Law legislation are not simple agreements. There are certain requirements which must be complied with if the agreements are to be binding. If these requirements are not properly dealt with the […]

Entering Into A Financial Agreement? Don’t Get Sold Short!

Entering Into A Financial Agreement? Don’t Get Sold Short!

KEY POINTS FOR ENTERING INTO FINANCIAL AGREEMENTS

Some helpful advice if you are considering entering into a Financial Agreement.

Financial Agreements under the Family Law legislation are not simple agreements. There are certain requirements which must be complied with if the agreements are to be binding. If these requirements are not properly dealt with the Court will have no hesitation in overturning a Financial Agreement should either you or your partner in the future not wish to be bound by its terms.

Solicitors are required to advise the parties entering into a Financial Agreement on the advantages and disadvantages of entering into those agreements. The parties sign a certificate attached to the agreement that they have received this independent legal advice. The solicitors also sign certificates stating that they did provide the advice required prior to the parties signing the agreement.

The advice not only deals with the terms of the agreement itself but also provides a full advice on the legislation under the Family Law Act and the positions the parties would be in if they had not entered into the agreement.

DRAFT AGREEMENTS

Agreements are drafted to suit the particular circumstances of each case. The agreements come under different sections of the Family Law Act depending on whether the parties are in a de facto relationship and wish to remain in that relationship, if the parties are in a de facto relationship and intend to marry, an agreement during a marriage and also an agreement after a divorce setting out the terms of a property settlement dealing with the financial issues arising from the breakdown and the divorce in the marriage.

When drafting the agreement and to enable a solicitor to provide the required advice it is necessary to obtain detailed instructions of the relationship, contributions made by the parties at the commencement of the relationship and contributions made by the parties during the relationship. Without these instructions a full and proper advice cannot be provided.

Once a client’s instructions have been obtained in regard to the relationship and contributions it is then necessary to obtain the details instructions in regard to the wishes of the parties in regard to assets they wish to maintain full and legal control over and those assets which are to be joint assets. Instructions are also required in regard to superannuation, estate rights and spousal maintenance should the relationship breakdown or if there is a death of one of the parties.

Once the agreement has been drafted setting out the parties’ joint instructions to their respective solicitors it is then necessary to provide a detailed advice on the terms of the agreement reached and on the advantages and disadvantages of entering into that agreement.

Unless all these steps are carried out and proper advice given there is a strong possibility that the agreement would be overturned by the Family Court if a party upon separation wishes to set aside the agreement and seek a greater property settlement than that set out in the agreement itself.

It is necessary for both parties to provide schedules setting out their present assets, liabilities and resources including superannuation. The updated schedules are required to be attached to the Financial Agreement itself.

It is to be hoped that the parties agree on the values of the items set out in the schedules without requiring formal valuations to be carried out. The solicitor acting for the other party is required to give the advice that have been mentioned.

It is necessary that the other party obtains an advice from a competent family lawyer and receives a detailed advice in writing. There are many cases where the agreements have been set aside when the partner has not obtained that detailed advice.


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