In the past, some of our customers have experienced a frustrating technicality when making a binding financial agreement if they were living together in a de facto relationship, but planning on getting married at some point in the future.
You can make a Financial Agreements under the de facto provisions of the Act or the marriage provisions of the Act. The result being, that if a couple makes a binding financial agreement under the de facto provisions of the Act, the agreement will no longer apply if the couple married!
Similarly, if the couple made a pre-nuptial agreement in anticipation of marriage, but the marriage did not eventuate, and the parties remained in a de facto relationship, the Agreement would not cover the breakdown of the de facto relationship.
The courts have recently cleared up this confusion in the case of Piper & Mueller .
In this case, a couple who were currently residing in a de facto relationship, but with the intention to get married in the future, made their agreement under both the de facto provisions of the Act and the marriage provisions of the Act. This, they intended, would cover them while they were living in a de facto relationship before getting married, and later, once married.
The marriage did not eventuate, and the validity of the Agreement was challenged before the courts. One of the grounds for the challenge was that the financial agreement was made under both de facto and marriage sections of the Act and not effective.
However, the Court rejected this argument and concluded that there was nothing in the legislation preventing an agreement from being made in relation to both the de facto and marriage provisions of the Act.
The Court stated that while the couple were in a de facto relationship, the de facto provisions of the Agreement would apply. Once the couple were married, the de facto provisions essentially fell away from the Contract, and the marriage provisions would become effective.
This is good news for our customers who are in a de facto relationship but who also intend to get married in the future.
Instead of having to go through the process and expense of creating a financial agreement twice (one for de facto and one later for marriage), the same de facto agreement will indeed survive marriage.
However, it is always wise to review your agreement regularly, especially if you do decide to get married or have children, to ensure that it still accurately reflects the wishes of both parties. You can always end a financial agreement and make a new one if it no longer represents your wishes.