Should I have a financial agreement or pre-nup?
Parties to a de facto relationship or marriage can decide to enter into a financial agreement (also commonly known as a pre-nup) to determine the division of their property and payment of spousal maintenance if they separate.
Why would I want a financial agreement?
A financial agreement allows the parties to a relationship to determine how their assets and liabilities are divided if they separate, without the intervention of the Family Courts.
Financial agreements are popular in cases where parties would like to be up front with one another in relation to how they will arrange their financial affairs during and after the relationship, or where one party has brought a lot more assets into the relationship, or where one or both of the parties seeks to preserve their existing assets for the benefit of children born of previous relationships.
Having a financial agreement can avoid the costs and stress involved in resolving your property matters if you separate.
What do I need to do?
In order for a financial agreement to be enforceable, strict rules under the Family Law Act (the Act) must be met, as enforceable agreements exclude the jurisdiction of the Family Courts, and you need legal advice and the assistance of a lawyer in preparing your financial agreement, or advising you in relation to a financial agreement prepared by your partner’s lawyer.
To be binding a financial agreement must be in writing and signed by all parties after the independent legal advice required under the Act has been given. A financial agreement can be made prior to, during or after marriage or a de facto relationship, and depending on the nature and stage of the relationship there are differences in what a financial agreement may contain.
It is not possible to make a financial agreement yourself.
Even where the legal requirements under the Act are met, it is possible that a party to the financial agreement can make an application for the financial agreement to be set aside. The Family Courts do have the discretion to set aside a financial agreement where grounds to do so are established. Examples of successful applications being made to set aside a financial agreement include where a party:
- has not provided details of all of their assets;
- is influenced by the other party into signing the financial agreement;
- has not received independent legal advice about the proposed agreement;
- has tried to defeat a creditor in making the agreement with their partner;
- suffers hardship in relation to the care of a child of the relationship, despite the financial agreement being binding.
It is important to obtain proper legal advice in preparing your financial agreement.
What is the alternative to a financial agreement?
If you do not have a financial agreement and you separate from your partner, you are able to negotiate your property matter to resolve it between you. Where you are not able to reach an agreement, a solicitor will be able to help you, and will provide you with advice in relation to the anticipated property division, with the aim of resolving your matter by obtaining Consent Orders from the Court in order to properly finalise your matter. If you are unable to resolve your matter, court proceedings can be issued, and if you are unable to resolve your matter during the Court process including mediation, ultimately the decision on your matter is made by a Judge.
What is the next step if I would like a financial agreement?
For advice on whether a financial agreement is right for you, contact one of the family law team at Scanlan Carroll for further advice and next steps.