At Best Wilson Buckley Family Law we are often asked about the value of `Pre Nuptial Agreements’, known in Australia as Binding Financial Agreements. These are documents which set out, in a prescribed way, what will occur in the unlikely event of separation. The agreement is signed by both parties after obtaining legal advice and will generally set out: –
– The assets and liabilities held by each party at the date of the Agreement (your separate property’);
– Your shared intentions in relation to who is to retain your `separate property’ in the event of separation;
– How property acquired jointly during the relationship is to be dealt with if separation occurs; and
– How inheritances, gifts and windfalls are to be treated and divided if it becomes necessary to do so.
Agreements can be drafted in anticipation of marriage or simply cohabitation, or after both have occurred if a couple simply desire some clarity around where they both stand.
Importantly, the Agreement has the effect of `ousting’ the jurisdiction of the Court. In other words, if an Agreement is binding upon a couple who have separated, the Court is obliged to honour the terms of the Agreement unless the Agreement is set aside. This avoids costly negotiation and litigation.
Naturally, raising the prospect of such an agreement can cast a shadow on what is an exciting and optimistic time. It needn’t do so. It is best to raise the prospect of the Agreement early, and by emphasising the benefit to both of you of having some clarity around arrangements. Ironically, confusion about intentions and a lack of clarity around these issues can often lead to relationship conflict and the breakdown of a relationship.
Where one has already endured the emotional and financial cost of prolonged negotiations or litigation following a previous separation, often a great deal of comfort is drawn from knowing that if there is a next time (in terms of separation) there will be no question as to what is to occur. Similarly, an Agreement has the potential to improve relationships between new spouses and adult children. If adult children are assured as to the intentions of a new spouse, often they will be more willing to embrace the new relationship. Also, if a spouse is deeply entrenched in family business or farming enterprises, there is really an obligation to protect other family members or business partners from the prospect of expensive litigation over the value of business/farming interests or worse still, the prospect of the sale of the family farm or business to pay out a departing spouse.
Be cautious of the allure of a `budget’ agreement or pro forma Agreement. If the Agreement is not prepared properly and specifically for your personal circumstances, it is more likely to be set aside and afford you no protection at all. The value of an Agreement to your unique situation is something that should be discussed on a confidential basis with your family law specialist.
More information can be obtained from our Toowoomba Family Law Lawyers.
The information contained herein is not intended to be a complete statement of the law on any subject and should not be used as a substitute for legal advice in specific fact situations.