Financial & Prenuptial Agreements

Prenuptial Agreement Lawyers can assist you in preparing yours

Financial agreements allow parties to a marriage to protect property. Couples either before or during a marriage, can enter into separate binding contract – known as a prenuptial agreement – to determine how their property is to be divided in the event of a breakdown of their relationship.

The agreement usually only becomes relevant in the event of a breakdown of the marriage. In some cases the existence of an agreement may be relevant to the interests of creditors of one spouse. An agreement can deal with any of the property or financial resources of either or both parties to the marriage.

Financial agreements have commonly been referred to as “Pre-Nuptial Agreements” and were restricted to people contemplating marriage. Couples may also enter into agreements once they are married but before they are divorced. This is a unique Australian concept and one not recognised in many overseas jurisdictions.

In order for a financial agreement to be binding under the Family Law Act, the agreement must meet certain criteria set out in the legislation, including independent legal advice being provided. Once all criteria are met then it is known as a binding financial agreement.

It is to be noted that a Binding Financial Agreement continues to operate despite the death of a party to the agreement and operates in favour of and is binding on the executors of that party.

The advantages for couples entering into such agreements are:

• To clarify ownership of assets brought into a marriage/relationship;
• To clarify ownership of special assets acquired during a relationship (for example an inheritance);
• To protect ownership and retention of business interests;
• To prevent costly, lengthy litigation if the relationship does breakdown.

Who needs an agreement the most?

The people who would potentially benefit most from such an agreement are:

• People entering into their second marriage, to avoid the stress and cost associated with the potential breakdown of their second marriage and to provide for pre-existing children.
• Couples employing asset protection. For example, where couples put all personal assets in the wife’s name, an agreement can be prepared acknowledging the husband’s financial interest regardless of whose name the property is in.
• People with substantial assets who are already in a relationship or about to enter a relationship and who need to protect their interests and require certainty.