Binding Financial Agreements
Enjoy peace of mind that your assets are protected if your relationship breaks down. Rankin Ellison can provide expert advice to help you plan for the unexpected with a Binding Financial Agreement.
No one plans for their relationship to fail, but many partners fail to plan. A Binding Financial Agreement, (often referred to as a Prenuptial Agreement or ‘Prenup’ when established before getting married) is a practical way to protect your assets in the event that your relationship breaks down one day.
If properly made and executed, this document can provide certainty about which assets belong to each partner should you separate, helping you to avoid disputes over division. An Agreement can be made before starting a de facto relationship or getting married or while you are in a de facto relationship or married. Planning for the future can give great peace of mind.
In order for a Financial Agreement to be binding in Australia, there are very strict requirements that must be met. One of the most important is that each party must have received independent legal advice before signing the agreement.
As a highly experienced family lawyer, I am able to provide expert advice on the advantages and disadvantages of entering into a Binding Financial Agreement including a Prenuptial Agreement. I will ensure that your interests are fairly represented and that the Agreement complies with the strict guidelines outlined in the Family Law Act.
If you already have an Agreement in place but no longer think the terms are fair or equitable, I can advise you on whether the terms are likely to be binding or whether they could be set aside. I can also assist you to negotiate a new Agreement.
I deliver honest, considerate advice to clients entering into Prenuptial Agreements, explaining what should be included with unparalleled expertise and care.
As a Binding Financial Agreement is a contract that ousts the jurisdiction of the Family Court and Federal Circuit Court, it is strongly recommended to seek specialist support from an expert lawyer. At Rankin Ellison, we pride ourselves on our many years of experience in helping clients navigate the complexities of Family Law.
A Prenuptial Agreement or ‘Prenup’ is a colloquial name for a type of Binding Financial Agreement. This is a legal contract between partners that sets out how their property and assets will be distributed in the case of separation or divorce.
A Binding Financial Agreement can be signed at any stage during a relationship. Parties often discuss entering into an Agreement early in a relationship but never get around to doing it. If you are thinking about it, come and see us now. We will help you to get it done.
A Binding Financial Agreement can cover:
- Designation of assets as either property that one party will keep (e.g. personal or separate property) and property that will be divided between the parties (e.g. marital or shared property) in some proportion.
- Treatment of future acquired property such as an inheritance or gift from family.
- Financial obligations throughout the marriage or relationship, such as who will pay household expenses.
- Who will take responsibility for debt and other financial liabilities.
- Financial support after separation (e.g. spousal maintenance and support).
This contract can address other issues such as savings and spending strategies, investment and retirement plans or Estate planning. These issues could be covered in the Agreement but may not be binding on the parties. It can still be very helpful to consider future financial plans.
Although discussing the potential breakdown of your relationship is not the nicest or easiest task when you are hoping for “happily ever after”, a Binding Financial Agreement could be the most valuable planning step you ever take.
Think of it like your Will. Nobody wants to plan for their death, but we all recognise that it is a wise thing to do. A Binding Financial Agreement will protect your financial security post separation.
In particular, you should seriously consider this contract if:
- There is a significant difference between the assets you have at the start of a relationship or marriage and those of your partner.
- You have children from a previous marriage or relationship and you want to ensure that their financial future is properly protected.
- You have received an inheritance or you are likely to receive an inheritance in the future.
- You run a family business or farm with parents, siblings or other family members and they have interests that also must be protected.
If an Agreement including a Prenup has been properly prepared and meets strict criteria set out in the Family Law Act, it will be binding on the parties.
Those criteria include:
- The Agreement is in writing.
- The Agreement has been signed by both partners.
- Prior to signing the Agreement, each partner received independent legal advice about the impact the Agreement has on their rights.
- After signing, each partner received a signed statement from their lawyer verifying the solicitation of this advice.
- Partners exchange signed copies of their lawyers’ statements.
- The Court has not set the Agreement aside.
Even when an Agreement meets the strict requirements to be binding, the Courts still have a discretion to set the Agreement aside in certain circumstances.
Those circumstances include:
- Where the Agreement was obtained by fraud, for example one party lied or misled the other party to the Agreement or failed to disclose an important fact;
- The Agreement was intended to defeat the rights of another person;
- The Agreement fails to meet the legal requirements of a contract and is therefore void or unenforceable;
- Because of a change in circumstances, it is now impractical to carry out the terms of the Agreement;
- One of the parties engaged in unconscionable conduct while the Agreement was being made for example coercing the other party to make the Agreement with threats or undue pressure;
- There has been a material change in circumstances relating to the care or welfare of a child of the parties since the Agreement was made and the child would suffer hardship if the Agreement were not set aside.
If a Court makes an Order setting aside the Agreement, the usual provisions for property settlement will then apply.
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