Binding financial agreements — prenups, and agreements on separation
An agreement keeps a court out of your finances only if it was made the way the Act requires.
What we do here
- An agreement before marriage, or before moving in together
- An agreement during the relationship, when a business, an inheritance or a property purchase changes the picture
- A separation agreement, as an alternative to consent orders
- Independent advice and the certificate, where the other side's lawyer has drafted it
- Advice on an existing agreement: whether it binds, and whether it can be set aside
Which section applies turns on your stage. For married couples it is s 90B before the marriage, s 90C during it, and s 90D only after a divorce order has been made — so a couple who have separated but not divorced are still making a s 90C agreement. For de facto couples the equivalents are ss 90UB, 90UC and 90UD, and s 90UD is available once the relationship has broken down. The agreement has to be expressed to be made under its section. One that is not is not a financial agreement at all.
What makes an agreement binding
Section 90G(1) of the Family Law Act 1975 (Cth) sets out the requirements for married couples, and s 90UJ mirrors them for de facto couples. An agreement binds if, and only if all of them are met: every party signs; before signing, each party is provided with independent legal advice from a legal practitioner about the effect of the agreement on their rights and about its advantages and disadvantages; each party is provided with a signed statement from that practitioner that the advice was given, which may come before or after signing; a copy of that statement goes to the other party or their lawyer; and the agreement has not been terminated or set aside.
The advice must come before the signature. The certificate recording it can come afterwards.
Section 90G(1) is expressed to be subject to s 90G(1A), which lets a court declare an agreement binding even though the advice, the statement or the exchange of it was not done, where the court is satisfied it would be unjust and inequitable for the agreement not to bind, disregarding any change in circumstances since it was made. Section 90UJ(1A) does the same for de facto couples. That is a discretion, exercised on an application by the party trying to enforce the agreement, and it costs a contested hearing.
You cannot share a lawyer. The certificate is the evidence that the advice was given, so it is not a formality to sign on the day.
When a court can undo one
Section 90K, and s 90UM for de facto couples, let a court set an agreement aside on grounds that include fraud, which s 90K(1)(a) says includes non-disclosure of a material matter; the agreement being void, voidable or unenforceable under s 90K(1)(b); and unconscionable conduct under s 90K(1)(e). The second of those is the limb that duress and undue influence run through, and it is the one that does the work. In Thorne v Kennedy [2017] HCA 49 the High Court held two agreements voidable for undue influence and for unconscionable conduct, the first signed four days before the wedding and the second shortly after it.
Agreement or consent orders?
After separation, both routes finalise a property settlement and they are alternatives, not steps. Consent orders are made by a court and are enforceable as orders. An agreement is private, no court sees it, and each party must have independent advice. More on consent orders and separation.
What it costs
Figures include GST. Disbursements are extra and your fee is confirmed in writing before work starts.
Indicative ranges for the documents named. Full list for this area.
Questions people ask
Yes, if it is made as a financial agreement under the Family Law Act 1975 (Cth) and the formalities are met. Section 90G(1) says an agreement is binding "if, and only if" it is signed by all parties, each party was provided with independent legal advice before signing about the effect of the agreement on that party's rights and about its advantages and disadvantages, each party was provided with a signed statement from that practitioner that the advice was given, a copy of that statement went to the other party or their lawyer, and the agreement has not been terminated or set aside. Section 90UJ does the same for de facto couples. Section 90G(1) is subject to s 90G(1A), which lets a court declare an agreement binding even where the advice or the statement was missed, if it would be unjust and inequitable for the agreement not to bind — a discretion on application, not something to plan around.
No. Each of you needs your own. Each lawyer signs the statement confirming the advice was given, and one lawyer cannot give it to both sides. Trying to save on the second lawyer is the most common way an agreement stops being binding.
Yes. A court can set an agreement aside under s 90K, or s 90UM for de facto couples. The grounds include fraud, which s 90K(1)(a) says includes non-disclosure of a material matter; the agreement being void, voidable or unenforceable under s 90K(1)(b), which is how duress and undue influence are run; and unconscionable conduct under s 90K(1)(e). In Thorne v Kennedy [2017] HCA 49 the High Court held two agreements voidable for undue influence and unconscionable conduct — the first signed four days before the wedding, the second shortly after it. Disclosure, time and genuine choice are what make one hold.
Earlier than the drafting takes, because the drafting is not what sets the pace. Section 90G(1)(b) requires each party to have independent advice before signing, so the other party has to instruct their own lawyer, receive advice and have time to act on it. Signing in the days before the wedding is the fact pattern a court looks at hardest: in Thorne v Kennedy the first agreement was signed four days out.
An agreement can provide for what happens on a child being born or a business being sold, and that is the cheapest way to deal with change. Otherwise s 90J allows only two routes: a provision terminating it in a new financial agreement, or a written termination agreement. Either way the termination has to carry the same independent advice and the same signed statements, so undoing an agreement costs about what making one costs.
Guides on this
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The assistant works out the area of law and whether a time limit is running, then sends it to the solicitor the same day.