A binding financial agreement, sometimes known as a prenuptial agreement, sets out the way some or all of a couple’s assets will be divided in the event that their relationship breaks down. It can also deal with spousal maintenance.
The Family Law Act 1975 (Cth) allows married couples and de facto couples to enter into financial agreements which are legally binding. Although a binding financial agreement can be signed at any point during a relationship, it is preferable that the agreement is put in place before getting married or entering into a de facto relationship (i.e. living together).
Whether you are thinking about getting married or remaining in a de facto relationship for the foreseeable future, establishing the agreement while you are happy in your relationship is far more likely to result in a prenuptial or de facto financial agreement that is fair to both of you, and will ultimately save you time and money.
Protecting your wealth in relationships
You’ve worked hard for your money and it’s important that, as you enter a serious relationship, you take steps to protect your assets.
It is important to consider a binding financial agreement when:
- you have more money, property or assets than your partner at the beginning of your relationship
- you may, at a later stage, be entitled to an inheritance or large gift
- you operate a family business or investment that you need to preserve
- you want to ensure the terms of any property division are agreed up front to avoid going to court later
- you are forming a new relationship and you have children who need to be protected financially.
In the following video series, CGW family law partner Justine Woods discusses what you need to know about binding financial agreements for married and de facto couples, including the advantages and disadvantages, the potential risks and loopholes, and what the process is likely to involve.
What is a binding financial agreement?
In this short introductory video, we look at the circumstances under which you should consider putting a binding financial agreement in place.
What are the advantages and disadvantages of binding financial agreements?
There are a number of advantages and disadvantages to consider when putting a binding financial agreement in place. In this video we examine the major advantages, the drawbacks and legal loopholes.
Is your binding financial agreement really binding?
One of the key issues in executing your binding financial agreement is to ensure that it is in fact, binding.
Binding financial agreements need to be carefully drafted to ensure they consider any structures in place, such as family trusts, companies and self-managed super funds, as well as tax implications and any other obligations.
The prenuptial greement must be drafted to ensure it meets all of the many legal requirements and in a way that means it will be upheld in the future if challenged. If your partner has asked you to sign a binding financial agreement, you must obtain independent legal advice, preferably from a lawyer specialising in family law, before you sign.
How to get a prenuptial agreement in Australia
Don’t wait until just before your wedding! Allow several months for the agreement to be drafted, reviewed and signed by both you and your partner.
It is essential that you work with an experienced lawyer to prepare your binding financial agreement. Our expert team of family lawyers in Brisbane is experienced in dealing with complex scenarios and the associated tax and property implications.
To speak with an experienced Brisbane lawyer about drafting a legally binding prenuptial or de facto financial agreement, call (07) 3231 2444. You can also access further information on financial agreements and the cost of drafting one on the links below.