Proposed Amendments to Binding Financial Agreements
Friday 1 May 2015 @ 11.10 a.m. | Legal Research | Taxation
Commonwealth Attorney General George Brandis has released the exposure draft for the Civil Law and Justice Legislation Amendment Bill 2015: family law. The proposed legislation will make amendments to the binding financial agreement provisions of the Family Law Act 1975. Specifically, the amendments seek to remove existing uncertainties around requirements for entering, interpreting and enforcing agreements.
Background
Binding Financial Agreements are out-of-court, private agreements between people that outline how property and other financial matters will be dealt with in the event of the breakdown of a marriage or de facto relationship. These are colloquially known as pre-nuptial agreements. The binding financial agreement provision in the Family Law Act has faced a number of challenges against its validity.
The aim of the current proposed amendments is to ensure that prospective, current or former parties to a marriage or de facto relationship can take responsibility for resolving their financial and maintenance matters without involving a court.
The Draft
The exposure draft would amend the binding financial agreement provision to:
- Clarify the circumstances in which an agreement may be binding or when they may be declared by a court to be binding to overcome uncertainties in interpreting the existing law;
- Clarify the requirements for legal advice to be provided to parties entering into financial agreements;
- Remove the requirement that a value must be attributable to a maintenance provision where the maintenance provision relates to an entitlement to property;
- Validate the waiver of spousal maintenance in agreements except in circumstances where parties would otherwise be dependent on government subsidy;
- Terminate ongoing spousal maintenance in the event of remarriage or entry into a new de facto relationship unless otherwise specified by the agreement;
- Remove provisions that provide an agreement covering at least one superannuation interest that is unsplittable is a ground for setting aside the entire agreement.
Submissions for the draft must be submitted before the 19 June 2015.
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