Financial Agreements

With 32% of marriages ending in divorce a well thought out financial agreement is always a smart idea.

It’s hard to know what relationships will and won’t last. Over 32% of Australian marriages will end in divorce—and most statistics suggest the separation rate for de-facto spouses is fairly similar. That’s why financial agreements are an effective strategy for both defending your assets and dissolving future conflicts.

So what’s a financial agreement and how does it differ from a prenup?

Most of us are familiar with the term prenup; and while a pre-nuptial agreement definitely falls under the umbrella of financial agreements it only represents a fraction of the spousal contracts you can enter into.

When can I enter into a financial agreement?

A financial agreement can be signed at anytime before, during or after a marriage. The contract is entered into by two parties and can include the division of property, finances, liabilities, superannuation, spousal maintenance and more. Like most spousal contracts, it’s crucial you and your partner seek independent legal advice. Failure to do so will render the contract void.

What kinds of financial agreements are there?

Because there are different kinds of relationships there are several types of financial agreements available to accommodate them. The different contracts available are as follows:

  • In contemplation of a marriage;
  • In contemplation of a de facto marriage;
  • During a marriage (including after separation but before divorce);
  • During a de facto relationship;
  • After a divorce; or
  • After the end of a de facto relationship.

Why would I want a financial agreement?

Financial agreements are designed to help people avoid costly and time hungry litigation. Because court time is almost always traumatic and severely delays the separation process, we always work towards reasonable financial agreements over legal action.

A financial agreement also gives you more control over the separation of property. Once your matter is in the hands of the court, it’s the judicial officer’s place to decide what you do and don’t get. During this time our solicitors can also help you manage other issues such as spousal maintenance, child support, adult child maintenance, estate claims and the updating of your will.

How do I ensure my financial agreement is legally binding?

Your financial agreement is legally binding as long as the following are attended to:

  • The agreement is signed by both parties;
  • Each party has obtained independent legal advice;
  • A statement regarding the fact that each party’s counsel advised them of the advantages and disadvantages of the financial agreement is attached to the agreement, alongside a certificate signed by their legal practitioners.
  • The agreement has not been terminated or set aside by a court of law;
  • Once signed, one party is to receive the original agreement. The other party will receive a certified copy.
  • A separation declaration has been made. This declaration must be signed and states that you and your ex partner have separated and are living separately with no reasonable likelihood for the relationship to be resumed.

Are de facto financial agreements any different?

From 1 March 2009 the rules about your binding de-facto financial agreement is covered by the Family Law Act (the same applies across Australia with the exception of Western Australia). Because of this there are now few differences in the process of drawing up financial agreements for de-facto couples and married couples. Same-sex de-facto couples are covered by the same legislative act.

Tending to your financial security now can save you a fortune in the future.

If you want more advice about legally binding financial agreements talk to a family lawyer, or fill out a contact form now and we’ll get back to you soon.

We also work with Mike Van Den Berg of Aussie Legal, who help individuals draw up DIY legal financial contracts at an affordable price. You can get in touch with Mark via the Aussie Legal website, or call him today on 1300 728 200.