PRE-NUTIAL OR BINDING FINANICAL AGREEMENTS – NOT AS STRAIGHT FORWARD AS YOU MIGHT THINK
Prenuptial agreements or binding financial agreements as they are called in Australia, will set out how all or some of the assets, (owned by you at the date of signing the agreement or acquired after signing the agreement), will be distributed between you, and your partner in the event of breakdown of the marriage or de facto relationship.
The agreement may also allow for maintenance issues to be dealt with after divorce or separation.
It is important to be aware from the outset that binding financial agreements are complex documents and special care needs to be taken in the preparation of the agreement. Further, care must be taken to ensure each party has attended to the specific requirements set out in the Family Law Act. If you are contemplating marriage or entering a de facto relationship, or considering entering a binding financial agreement during your relationship, it is imperative you engage a lawyer to draft and execute a pre-nuptial agreement/ binding financial agreement for you*.
*Always know your legal options by consulting a specialist Family Lawyer in Brisbane / North Lakes.
PRE-NUTIAL AGREEMENTS AND FINANCIAL AGREEMENTS, BEFORE, DURING AND AFTER RELATIONSHIP BREAKDOWN
Parties can enter into a pre-nuptial agreement or binding financial agreement regarding assets acquired:
- before and during the relationship; as well as
- after the relationship has ended.
Note: Brisbane pre-nuptial agreements and binding financial agreements can be particularly useful where you have inherited assets from a family estate, or where you have accumulated your own personal wealth from a successful career and making wise investments.
BINDING FINANCIAL AGREEMENTS GENERALLY
Financial Agreements under the Family Law Act are not simple agreements. There are specific requirements which must be complied with if the agreements are to be binding. If these requirements are not properly adhered to the Court may set aside the agreement should either you or your partner in the future not wish to be bound by its terms.
Lawyers are required to advise the parties entering into a binding financial agreement as to the advantages and disadvantages of entering into the terms of the agreement.
The parties sign a certificate attached to the agreement confirming that they have received the required independent legal advice. The lawyers also sign certificates confirming the requisite advice was provided prior to the parties signing the agreement.
The advice provided by the lawyer must not only deal with the terms of the agreement itself but must also address, the legislation under the Family Law Act and the positions the parties would be in if they had not entered into the agreement.
When drafting the agreement your lawyer will take detailed instructions regarding the relationship, instructions regarding contributions made by the parties at the commencement of the relationship and contributions made by the parties during the relationship. These instructions are required so that comprehensive and correct advice can be provided. Without these instructions, a full and proper advice cannot be given.
Instructions are also required in relation to superannuation interests, estate rights and spousal maintenance should the relationship breakdown or if there is a death of one of the parties.
Once the agreement has been drafted detailing the parties’ joint instructions to their respective lawyers, each party is given comprehensive advices on the advantages and disadvantages of entering into that agreement.
As you can see the process of drafting and formalising a binding financial agreement is not straight forward. Often people seek to enter into binding financial agreements on the understanding it is a quick and easy process, however this is not the case.
ARE PRE-NUPTIAL OR BINDING FINANICAL AGREEMENTS REALLY BINDING?
Well, the answer in Australia is not always an easy one. When a pre-nuptial agreement or binding financial agreement is carefully drafted in accordance with the legislation, it can be a strong and impenetrable document.
However, pre-nuptial or binding financial agreements can be compromised by a number of factors including the failure of a couple to be honest in relation to holdings when the agreement is drafted, or where a couple over time co-mingle their assets and the boundaries become unclear. Further, binding financial agreements can be set aside in circumstances where one of the parties did not obtain the requisite legal advices as provided for in the legislation.
Much can turn on the quality of the drafting of the binding financial agreement and the independent legal advice received by both parties before signing the document.
In the end, it is important to consider that a binding financial agreement is not worth pursuing if you are unprepared to commit to a thorough process of negotiation and disclosure and a comprehensive and well drafted agreement.
At Preston and Associates, we often meet with a client who simply wants to explore whether a binding financial agreement is something that would be of benefit in his/her particular case.
For many individuals, you have previously been through a difficult property settlement negotiations or Court proceedings, having a binding financial agreement in place in relation to their new relationship is a very attractive prospect to alleviate any risk of conflict or uncertainty in the future. Binding financial agreements can be very usual documents in preventing future conflict and uncertainty.
As you can see from this brief blog there is much to know if you are considering embarking on the process of entering into a binding financial agreement.
Before taking any action, we suggest that you consult with a specialist family lawyer Brisbane / North Lakes who can provide you with detailed advices specific to your particular circumstances. This will allow you to make an informed decision as to whether a pre-nuptial or binding financial agreement is the most suitable document for you.
Contact Preston and Associates: Family and Criminal Law to arrange an appointment with one of our expert family lawyers Brisbane / North Lakes.
Disclaimer: This blog is produced by Preston and Associates: Family and Criminal Law. This blog is not intended to give legal advice. This blog provides general information only on topics related to family and criminal law. At no time, should you rely upon such general information as legal advice. We encourage you to contact Preston and Associates to seek legal advice regarding the circumstances of your matter.