A financial agreement is commonly referred to as a “prenuptial agreement”.
However, these agreements can be executed before, during or after a relationship.
A financial agreement allows couples to negotiate how they will divide their assets on their own terms without involving a court.
– the cost and stress of arguing over a property settlement in the event of separation;
– potential litigation.
A Financial agreement executed before or during a relationship provides reassurance regarding protection of assets and financial security.
Financial agreements made after separation allow couples to resolve property matters in a speedy and efficient manner.
What can be included in a financial agreement?
Financial agreements can be used to clarify the following arrangements:
1. How property will be divided in the event that the couple separates. For example, the agreement may specify that each person retains some or all of the assets they had at the beginning of the relationship. Or, the agreement may specify a particular method for dividing assets on separation.
2. Any arrangements for financial support of either person referred to as “spousal maintenance”.
3. Any other matters which may be incidental or ancillary to the above two points.
Is the agreement binding?
For a financial agreement to be binding there are certain legal requirements that must be met.
It is crucial that the financial agreement is prepared by an experienced family Law solicitor.
Before signing the agreement, each party must be provided with independent legal advice. Your solicitor will advise on:
– the effect of the agreement;
– on the rights of that party; and
– the advantages and disadvantages of making the agreement.
Each person should make full disclosure about their financial position. A list of all assets, liabilities, and superannuation will usually form part of the agreement.
Consider all possible changes in circumstances.
A young couple who both work full time and own similar assets may consider it to be fair and equitable for each person to retain their own assets on separation. However, what if the couple were to have children? What if one parent decided to stay home with the children?
What may initially appear to be a fair and reasonable arrangement might not be in the interests of both parties should circumstances change.
Can an agreement be set aside if one party changes their mind?
Generally, no. The agreement cannot be changed unless both people agree.
However, there are some limited circumstances where a court may set aside a binding financial agreement. For example, if the agreement was obtained by fraud, duress or unconscionable conduct.
A court may also set aside an agreement where:
– circumstances have arisen since the agreement was made, making it impractical; or
– if it can be shown that a child, or a parent responsible for caring for the child, will suffer financial hardship.
If you are considering entering into a financial agreement, contact our office for an appointment. We can provide you with detailed advice in relation to your particular circumstances.