Pop up – Demo

Subscribe Form Popup

ShareThis

Our Expertise

Financial Agreements are commonly
referred to as Pre-Nuptial or Separation Agreements.

Financial Agreements were first introduced into the Family Law Act in December 2000 and have become a commonly used instrument since that time.
Indeed, the preparation and drafting of Financial Agreements now accounts for a considerable portion of our day-to-day practice at Wiltshire Family Law.

 

Despite the common misconception that Financial Agreements “are not worth the paper they are written on”, nothing could be further from the truth.  Financial Agreements are an extremely effective instrument whether executed in Pre-Nuptial or Separation Agreement format.

So yes… they do work!

Financial Agreements are a private agreement that can be entered before, during or after a relationship, and may deal with how all or some of the property is to be dealt with.  As such, Financial Agreements offer an enormous degree of flexibility both in terms of their operation, the property they deal with, the timing of the operative parts of the agreements and when it is executed.

Financial Agreements can deal with:

  • All or part of the assets, liabilities and/or financial resources of the parties;
  • The maintenance to be paid by one spouse to the other following separation;
  • The splitting of superannuation entitlements;
  • The regulation of financial affairs during the relationship itself; and
  • The division and regulation of incidental financial matters such as family trusts, corporate entities, shares in public and private companies, inheritances, financial windfalls, insurance payouts, family farms and businesses.

Although commonly referred to as ‘Pre-Nuptial’ or ‘Separation Agreement’, Financial Agreements are also available to spouses who are contemplating entering a de facto relationship, are already living in a de facto relationship or following separation from a de facto relationship.  As with all laws relating to de facto spouses under the Family Law Act, Financial Agreements are available to spouses in either a same sex or opposite sex relationship.

Pre-Nuptial Agreements

A Financial Agreement executed prior to a marital or de facto relationship allows the parties to document their intentions with respect to the division assets, liabilities and financial resources in the event of separation.

Financial Agreements of this nature can be executed in much the same form whether made in contemplation of marriage or a de facto relationship or after marriage or the commencement of a de facto relationship – so long as it is prior to separation.  For the sake of convenience, we shall refer generically to this form of agreement as “Pre-Nuptial Agreements”.

Whilst parties can be as creative as they wish when formulating the terms of their agreement, we have outlined three examples of Pre-Nuptial Agreements to illustrate how diverse they can be in operation:

  1. At one end of the spectrum are Pre-Nuptial Agreements that are designed to keep everything completely separate by providing that each party keep what they bring into the relationship and that there be no provision for commingling of resources or distributions of their respective separate property in the event of separation. Pre-nuptial agreements such as these are typically sought by parties who are older, are financially independent, are seeking to protect their accumulated wealth or quarantine their estate for children from previous relationships.  Pre-Nuptial agreements that make no allowance for the vicissitudes of life nor the financial needs of the parties at the time of their separation are seldom advisable.
  2.  In complete contrast to the Pre-Nuptial Agreement set out above, many Pre-Nuptial Agreements are entered for the purpose of ensuring there is an equal division of the assets, liabilities and financial resources in the event of separation.  In addition, such agreements are also designed to ensure there is a defined resolution pathway to ensure litigation is avoided. Such agreements can be as simple as implementing a process to:
    • Value the assets, liabilities and financial resources of the parties;
    • Divide the assets in the agreed percentage; and
    • Outline how any disputes are resolved in relation to the above.

    Such agreements are typically entered by spouses who are yet to accumulate wealth and/or who have relatively similar earning capacities.

  3. However, the most popular form of Pre-Nuptial Agreement falls somewhere in between the two examples provided above.  Usually, one of the parties will seek to quarantine a specific asset brought into the relationship should they separate.  Such an agreement may also provide a mechanism for the distribution of the remainder of joint and separate assets, liabilities and financial resources accumulated during the relationship. Whilst the list of such assets included in a Pre-Nuptial Agreement is non-exhaustive, some examples include equity in real property, an inheritance or future inheritance, an interest in a family farm, trust or business, shares, superannuation and/or an insurance payout. 

Although Pre-Nuptial Agreements are typically entered by the spouses with high hopes of a long and lasting relationship, they are an acknowledgement that many factors beyond their control can impact on their relationship.  Pre-Nuptial Agreements help people move on with greater financial certainty and by avoiding the high emotional and financial costs associated with litigation. 

Pre-Nuptial Agreements should not be entered lightly.  They should be entered freely by both parties after giving considerable thought to the intention and should reflect mutual intentions. 

Separation Agreements

Ordinarily, terms of an agreed property settlement are formalised by filing an Application for Consent Order.  This involves the parties completing a pro-forma document setting out their personal and financial circumstances together the proposed orders.  Once received, the Court will make the orders if it is satisfied that, in all the circumstances, the proposed orders are just and equitable.  Orders made by Consent are the most common, and cost-effective manner to formalise a property settlement.

However, Financial Agreements are also frequently used to formalise the terms of a property settlement, particularly where the terms of settlement are unorthodox.

As is the case with pre-nuptial agreements, separation agreements are a private agreement that allow parties more flexibility with respect to the terms of settlement whilst at the same time ensuring the agreement is both binding and enforceable.

Financial Agreements are commonly used to formalise financial settlements in the following circumstances:

  • When the Court is unlikely to make Orders by Consent for the following reasons:
    • The agreed terms of settlement may not be considered just and equitable (for example, if it is agreed one party shall retain a greater portion of the available assets than the court would consider just and equitable);
    • The parties have not determined the value of all assets, liabilities and financial resources;
    • The settlement is to occur over a protracted period or does not otherwise provide for a clean break as is required by the Family Law Act.
  • The parties require their settlement to be formalised urgently (the process for applying for Consent Orders may take upwards of eight weeks).
  • The parties wish to also make provision for spousal maintenance and/or child support payments within the one document.

For expert, tailored advice on how to protect your assets in the event of separation, contact one of Wiltshire Family Law’s qualified solicitors to discuss your personal situation and the preparation of a solid and sound Binding Financial Agreement.

Now for some technical information…

Talk to a specialist in family law
Contact us to talk to an expert in binding financial agreements. We will discuss your situation and assist to prepare a document that meets strict legal requirements.

Gold Coast 07 5554 1555
Sydney 02 9238 2118
Brisbane 07 3181 4328
Live chat