Contracting Out Of Spousal Maintenance Liability

In divorce matters and family law a frequently asked question is, how can I get out of spousal maintenance? How can my future spousal maintenance liability be made certain now? Can we reach some sort of agreement about spousal maintenance that will be final and not able to be changed in the future? The answer is yes.

What is spousal maintenance?

Spousal maintenance is a periodic or lump sum payment from one spouse to the other spouse, to assist the other spouse in supporting themselves after separation or divorce. Spousal maintenance also applies to couples in de facto relationships (provided the relationship broke down after 1 March 2009).

Can a spousal maintenance claim be made after property settlement?

The right to apply for spousal maintenance is still available even after a property settlement.

Spousal maintenance under consent orders or court orders

Orders can be made relating to spousal maintenance, however, these could be varied at some time in the future. There is therefore potentially no finality under this approach as the matter could be brought up again in the future, the ex typically might seek for an increase to the amount of spousal maintenance payable.

Finalising spousal maintenance using a binding financial agreement

The only way a party can contract out of future liability for spousal maintenance is to enter into a Binding Financial Agreement.

A Binding Financial Agreement that is drafted strictly in accordance with the legislation, is binding and enforceable under principles of contract law. However, there are very strict legislative requirements that must be adhered to in order for such an agreement to be binding and enforceable. Both parties to the agreement must obtain advice in relation to the advantages and disadvantages of entering into the agreement based on their particular circumstances, as well as the effect the agreement has on their rights. This is because the agreement is not filed in Court and there is no judicial officer to determine whether the terms of the agreement are fair, just, and equitable.

Due to the complex nature of Binding Financial Agreements (e.g. as to the requirement for independent legal advice to be given to both parties, or as to the drafting of terminating events provisions, etc.) and the need to make sure that they strictly comply with the requirements of the Family Law Act 1975 (Cth), making even a small error in the process of drafting, advising on, and executing of a financial agreement could render it unenforceable. For this reason, although a Binding Financial Agreement is the only way to contract out of future spousal maintenance liability, yet it should always be prepared for you by a lawyer.

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