Once upon a time Pre-Nuptial Agreements were the exclusive choice of millionaire celebrities and rich movie stars, but now smart couples are entering into Cohabitation Agreements as an important part in planning their future. Far from showing a lack of trust in a partner, these Agreements can prevent stress and legal costs in the event of a future separation. Particularly couples who may be entering into a second, or third, relationship and who have children to consider, appreciate the trauma they have previously gone through with property settlements, and wish to prevent a repeat performance. It became possible for those thinking of marriage, already married or separated, to enter into a Financial Agreement after amendments during 2000 to the Family Law Act.
Then after 01 March 2009 further amendments meant that defacto couples (same or opposite sex) have also been able to enter into these agreements either before, during or after separation. Parties entering into Financial Agreements can therefore arrange their own financial affairs in the event that the marriage or relationship fails, making it unnecessary to enter into court proceedings if the relationship breaks down.
The Financial Agreement sets out the assets each party brought into the relationship, and the assets each will retain on separation. This is described as “separate property”. Separate property can include property currently owned, and future property such as an inheritance. The Agreement also deals with “joint property” that is acquired by the parties together during the relationship, and how this will be divided in the event of a separation.
Matters that can also be dealt with the Agreement include financial resources such as superannuation, and maintenance. Without the aid of a crystal ball, it is often difficult to make provision for all future contingencies in a Financial Agreement, but if circumstances change, the Agreement can be redrawn and amended to make provision for those changes. These might include the birth of children, or a party’s illness and subsequent inability to work etc.
The length of the relationship may also come into consideration in the future, and the consequent contributions (financial and non-financial) of both parties during a long relationship. There are only limited circumstances in which these Agreements could be set aside, one being evidence that one party was induced to enter the Agreement by fraud or duress, or that there was not full disclosure of assets at the time the Agreement was signed.
If you are considering entering into a relationship, or are already in a relationship, then a Financial Agreement could bring peace of mind, and harmony, and allay fears of losing hard-earned assets. Although it is difficult in a new relationship, it is wise to think with your head, rather than your heart, so there are no regrets in the future.
Lyn Lucas is the owner of Online Divorce Lawyer. With 25 years experience in family law Lyn empathises with couples going through a separation and a property settlement. Her focus with Online Divorce Lawyer is to reduce the pain and deliver excellent results in the process of a property settlement. With a negotiated fixed fee for this service, couples have certainty as to their legal costs. Visit Lyn’s site and opt in for a complimentary e-book “Guide to Saving Money with a Divorce Property Settlement”.