In Australia, a pre-nuptial agreement or prenup is known as a Financial Agreement (FA). The purpose for which FAs are best known is to agree on a division of financial assets in the event of a separation, so that there’s no need for expensive litigation if things go wrong. FAs are especially relevant when one partner enters a marriage with far more financial assets than the other or if one or both parties are likely to inherit significant assets.
FAs have another, less well known purpose, which is for parties in a relationship which has already gone wrong to agree on division of assets without having to apply to the Family Court for Consent Orders. A key difference between FAs and Consent Orders is that FAs deal only with financial matters, and cannot be used to set out the terms of other matters, such as parenting arrangements.
If you are contemplating a Financial Agreement prior to marriage, there are two main areas you may wish to consider. The first is the emotional impact of telling your partner that you’d like him or her to sign such an agreement. Depending on the dynamics between the two of you, the suggestion itself may be a setback to the relationship. On the other hand, you may feel that resolving uncertainties about future possible financial arrangements may help you both move forward on the basis of a good, mutual understanding.
The second area to consider is the legal one. While a Financial Agreement helps minimise the risk of possible future litigation, it cannot provide a guarantee. If something comes to light after a FA has been made – for example, if one of the parties had deliberately concealed assets, or came into an unexpected inheritance – this could provide grounds for the other person to challenge the agreement.
If you would like to talk through the pros and cons of a Financial Agreement, Leach Legal offers a free, 15 minute telephone consultation to help clarify key points – call (08) 9486 9733 today.
When using a FA at the end of a relationship to resolve the division of financial assets, the same consideration needs to be given to legal matters. Both parties must have their own lawyers, and a broad, four step process needs to be followed:
Once this process is completed, a properly drafted agreement is a key to ensure that any Financial Agreement is unlikely to be set aside as a result of a subsequent challenge by the other party.
Our team of experienced, professional, Perth Family Lawyers are here to help with your financial agreement. Phone us for a free, phone consultation on (08) 9486 9733.
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