More frequently spouses who propose to enter into a De facto Relationships or intend to marry are wishing to minimise conflict in the event that despite their best efforts, the relationship might not work out. Since 2002 in relation to married couples and 2009 in relation to De facto and same sex couples; the legislation has provided parties with a mechanism whereby they can enter into a binding financial agreement / prenuptial agreement which will govern the separation of their finances in the event that the relationship should break down.
There are certain requirements that must be followed to ensure that such agreements are binding.
The requirements include:
(a) That each party must be independently legally advised.
(b) The Agreement needs to identify the relevant legislative section that is relying upon.
(c) The Agreement needs to comply with the Family Law Act in terms of the specifics of what is being released and on what terms.
The court has a limited ability to rectify a defective agreement, however on the whole, if those legal requirements are not met, the parties can enter into an agreement but it may not be binding.
The Agreement is evidence of what parties agreed at a particular time and sometimes there is financial information and a factual background of the relationship contained in the agreement which can be a helpful record of that information. Even if the agreement is found to be not binding, sometimes this provides very relevant information as to what the parties were prepared to agree to at a particular point time.
Binding Financial Agreements are not for all parties but are best suited for parties who are marrying for a second or other time or who have resided previously in married or defacto relationships but are now entering into a new relationship.
Advantages of a Binding Financial Agreement / prenuptial agreement can include:
- Providing some certainty and in some circumstances minimising legal costs.
- Giving the families of the parties marrying or moving in together some indication as to what the agreement will be if the relationship does not work out. This can be particularly important with adult children who may sometimes be feeling apprehensive about their parents entering into a new relationship. The Agreement can sometimes give the parties some comfort and clarity as to their respective financial obligation.
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Family law situations can be complex and sometimes they can involve serious issues. Information outlined is proposed to provide general guidance only. Due to the seriousness of legal matters as well as the uniqueness of your individual situation, professional advice should be sought. For advice, please contact one of our Family Lawyers.