Prenuptial Agreements in Australia
by
Jeremy Morley
Prenuptial agreements, known as "binding financial agreements," first became enforceable in Australia in 2000 with the enactment of the Family Law Amendment Act 2000. The pressure to allow binding pre‑nuptial agreements resulted from the major societal changes that had occurred in Australia, as in England, during the prior 30 years, such as changing views about marriage, higher rates of marriage breakdown, falling marriage rates, increasing cohabitation in marriage-like relationships and higher rates of second and subsequent marriages. Those pressures had intensified as cohabiting couples in Australia were permitted greater freedom of contract than married couples: ‘This created the extraordinary anomaly that the rights of married couples with respect to self-regulation of their financial affairs were significantly less than those of cohabiting couples'. When he introduced the legislation the Attorney General of Australia stated: ‘The changes in this Bill will attempt to bring the Act into line with prevailing community attitudes and needs'.
Part VIIIA of the Family Law Act sets forth particular provisions concerning the oversight to be given to such agreements by family law solicitors. For a binding financial agreement to be binding it must be in writing signed by both parties; be given (the original) to one party with a copy given to the other; specify the extent of any spousal maintenance provided; and state that both parties have received specified independent legal advice and annex a certificate of an independent lawyer to that effect.
An agreement will not be binding if it was obtained by fraud, was made under duress, by mistake, by virtue of undue influence, if it is impracticable for all or part of the agreement to be carried out, if there has been a material change in the care of a child leading to hardship, if a party engaged in unconscionable conduct when making the agreement, such as where one spouse is at a disadvantage and the agreement runs contrary to good conscience.
Serious issues arise as to whether an marital agreement entered into outside Australia that does not conform in every respect to the provisions of the Australian Family Law Act will be enforceable in Australia.
This can create momentously important issues when spouses who are parties to a non-Australian prenuptial or post-nuptial agreement relocate to Australia or if one spouse is of Australian nationality or there exists another basis for the Family Court of Australia to have jurisdiction over a potential divorce case.
Part VIIIA of the Family Law Act sets forth particular provisions concerning the oversight to be given to such agreements by family law solicitors. For a binding financial agreement to be binding it must be in writing signed by both parties; be given (the original) to one party with a copy given to the other; specify the extent of any spousal maintenance provided; and state that both parties have received specified independent legal advice and annex a certificate of an independent lawyer to that effect.
An agreement will not be binding if it was obtained by fraud, was made under duress, by mistake, by virtue of undue influence, if it is impracticable for all or part of the agreement to be carried out, if there has been a material change in the care of a child leading to hardship, if a party engaged in unconscionable conduct when making the agreement, such as where one spouse is at a disadvantage and the agreement runs contrary to good conscience.
Serious issues arise as to whether an marital agreement entered into outside Australia that does not conform in every respect to the provisions of the Australian Family Law Act will be enforceable in Australia.
This can create momentously important issues when spouses who are parties to a non-Australian prenuptial or post-nuptial agreement relocate to Australia or if one spouse is of Australian nationality or there exists another basis for the Family Court of Australia to have jurisdiction over a potential divorce case.
