I’ve read that the document is not legal if all assets are not revealed. Is this true? I’m not trying to withhold knowledge of assets, but I have heard that these have been thrown out if everything was not noted.
Answer: There is very little history at all with financial agreements being thrown out (or more correctly set aside) even though they have been available to married couples since 2000. Financial agreements for de facto couples have only been available since 1st March 2009 so there are no documented challenges in the court system.
The parties have a duty of disclosure to the court as well as each other. If one party tries to hide Assets or liabilities that effect the other party the party could go to court and argue to have the agreement set aside. It is important to note that a Financial Agreement is essentially a contract. All contracts can be set aside in certain circumstances, for example, where agreement has been obtained by fraudulent means.
Section 90K of the Family Law Act sets out the circumstances in which a Court may set aside a Financial Agreement; they are:
- fraud, including material non-disclosure (eg. failure to disclose the existence of or the true value of an asset); or
- a party to the agreement entered into the agreement for the purpose of defrauding or defeating a creditor or creditors of that party; or
- the agreement is void, voidable or unenforceable (ie. the agreement must be prepared properly and in accordance with the legislation); or
- circumstances have arisen since the agreement was made which make it impossible or impracticable for the agreement, or a part of the agreement, to be carried out; or
- since the making of the agreement, a material change in circumstances has occurred that was not dealt with or foreshadowed in the agreement (relating to the care, welfare ad development of a child of the marriage) and, as a result of the change, a party to the agreement will suffer hardship if the Court does not set the agreement aside; or
- a party’s conduct in the making of the agreement was, in all the circumstances, unconscionable;