In brief — Your rights are limited
If you have previously signed a prenuptial or postnuptial agreement and no longer agree to its terms, your rights are very limited.
Binding Financial Agreements
Pre or postnuptial agreements are known as Binding Financial Agreements. Binding Financial Agreements allow parties to contract out of the Family Law Act and come to their own agreement as to how their property will be divided if the marriage breaks down.
Two possible courses of action
If you are no longer happy with the terms of a Binding Financial Agreement there are two courses of action available to you.
One is to terminate the Binding Financial Agreement by agreement with your spouse. This can either be by entering into a new Binding Financial Agreement or by executing a Termination Agreement together.
The other possible course is to apply to the Court to have the Agreement set aside.
Setting aside a Binding Financial Agreement
The circumstances where a Court will set aside a Binding Financial Agreement are limited to the following:
- The Agreement was obtained by fraud, for example, where one of the parties to the Agreement did not give full disclosure, or the Agreement was entered into to defeat the claims of creditors
- The Agreement is void, voidable or unenforceable. This will require reliance on contractual principles, for example, whether there was duress when entering into the Agreement
- Circumstances have arisen that now make it impractical to carry out the terms of the Agreement
- Since the Agreement was made, there has been a material change in circumstances relating to the care, welfare and development of a child of the marriage and the child and/or parent who will have the care and responsibility for the child will suffer hardship if the Agreement is not set aside
- When the Agreement was made, a party engaged in conduct that was unconscionable
- The Agreement covers a superannuation interest that is unable to be split and if the Agreement covers a payment flag on a superannuation interest and there is no reasonable likelihood that the flag would be terminated by a flag lifting agreement
Division of assets
There are no requirements for the Binding Financial Agreement to provide for a fair division of the assets on the breakdown of the marriage, unlike the Family Law Act, which requires the court to consider whether the proposed orders are just and equitable (reasonable) in the circumstances. In summary, if a person has signed a Binding Financial Agreement and they no longer agree to the terms, it is important that they seek legal advice as to whether the Agreement itself complies with the legislative requirements of a Binding Financial Agreement and if not, whether it can be terminated or set aside.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.