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A financial agreement is a contract entered into by individuals which sets out how they want their property and financial resources to be divided, and their maintenance arrangements administered, if they separate, rather than relying on the process set out in the Family Law Act.

An agreement can be entered before, during and after the breakdown of a marriage or de facto relationship.

Financial agreements may be used by couples to:

• protect the wealth of one or both parties accumulated prior to entering a de facto relationship or marriage, together with further wealth accumulated in the future
• protect financial assistance received from families (including, for example, gifts, inheritances, loans and trust distributions)
• avoid the legal and emotional costs of dispute, negotiation and/or litigation in the event of, or following, separation; and
• enjoy the benefit of rollover relief provisions (in certain circumstances) to minimise the crystallisation of contingent liabilities such as capital gains tax.

There are very strict legal requirements which must be met before parties can enter into a financial agreement. In addition, it is essential that the parties entering into a financial agreement disclose their respective financial positions and negotiate in good faith. It is also important that parties allow sufficient time to negotiate, and enter into, a financial agreement. The subject matter of the agreement is often significant, and each party must be allowed sufficient time to consider, negotiate and take advice regarding the subject matter.

Spousal maintenance is the obligation of a person to financially support their former partner following the breakdown of their marriage or de facto relationship, to the extent that their former partner is unable to support himself or herself.

It is important to remember that, while childcare obligations are a relevant consideration in determining whether maintenance should be paid, spousal maintenance is distinct from, and can be ordered in addition to, child support.

A person is not automatically entitled to receive maintenance following the breakdown of their marriage or de facto relationship. Maintenance can only be ordered by a court if the following criteria are met:

1. The person seeking maintenance must be unable to support themselves adequately because:

• the person has the care and control of a child of the marriage or de facto relationship (provided that the child is under the age of 18 years)

• the person is unable to be gainfully employed by reason of age, or physical or mental incapacity; or

• for any other adequate reason.

2. The other partner will only be required to pay maintenance to the extent that they are reasonably able to do so.