Barry and Nilsson - Financial agreements and property settlements - the pitfalls

It is increasingly the policy of our governments that parties to an ended marriage or de facto relationship should be able to resolve their differences by way of agreement, rather than litigation.

It is also the case that newly committed couples are encouraged to enter into agreements to spare themselves further heartache upon the foreseeable, [Barry and Nilsson] yet unwanted, demise of their relationship.

Of the latter variety, there is still some resistance, particularly from young couples, who see the negotiation and existence of such an agreement as unromantic and contrary to the very nature of their new commitment. And before we laugh at their naivete, it must be remembered that it was not too long ago that such agreements were deemed void in Australian law as a imposition upon the sacred institution of marriage. There is some small hypocrisy in making a vow “for life” and at the same time negotiating to break that vow.

But, now we have them, and they ought to be used. Our preferred form of advice to unwilling couples is to think of the agreement a little like a will. No-one plans to die, certainly not in the short term future, and yet a will provides for that eventuality.

It is also our experience that agreements made at the start of a relationship can disfavour women. Even couples willing to enter into agreements generally negotiate it on the basis that what each party brings in to the relationship is theirs and they will split what they acquire during the relationship equally. It seems fair, but it’s usually not. [Barry and Nilsson] The reason being is that inevitably during a lengthy relationship, the dynamics of the relationship change. One party, usually the man, acquires the greater financial control. One party, usually the woman, sacrifices career and money for the primary care of children. Inevitably couples do not consider the “future needs factors” the courts must consider in property settlements in Queensland – for both married and de facto couples.

There are mechanisms to counter this – sunset clauses, contingency clauses and the like. All are acceptable. But even sophisticated couples will be reticent to find out they might have to do this unromantic thing again, perhaps at a time when the relationship is at its zenith – at the birth of a child.

Further still, our governments have decided that if the agreements don’t “tick all the boxes” the relevant legislation requires, then the parties may well have not bothered. If a de facto couple does not have a “recognised separation agreement” as opposed to an “agreement,” or if a married couple does not have a “binding financial agreement” as opposed to an “agreement,” then the agreement is almost of no value whatsoever.

What does this all mean?

Unfortunately, and perhaps in spite of the governments’ policies, it is simply impossible for these agreements, if they are to be just, equitable and binding, unless each party consults upon a family lawyer. If you, or someone you know, is about to start living with someone else, get married, or is dealing with the death throes of a relationship, encourage them to enter into an agreement and to seek the appropriate advise to make the agreement work.


For further information on this topic, please contact Barry and Nilsson Lawyers.