Pre-nuptial & Financial Agreements

The Family Law Act allows couples (including de-facto couples) to enter into written financial agreements to determine how their financial affairs are to be resolved in the unfortunate event of separation. The financial agreement can be entered into in contemplation of a marriage (commonly known as “pre-nuptial”) or a de facto relationship, during a marriage or a de facto relationship and after divorce or breakdown of a de facto relationship.

For financial agreements to be legally binding, the agreement must comply with all legal requirements set out under the Family Law Act or the Family Court Act including both parties must obtain independent legal advice (evidenced by a solicitor’s certificate) before signing the agreement. Once the financial agreement is made, it can only be altered or terminated by making a new agreement or with orders from the Court.

Commonly, making of a financial agreement is intended to avoid the need for the parties to go to court in the event of relationship breakdown but there are both advantages and disadvantages for having a financial agreement, and whether the agreement is suitable to your situation will need to be determined on a case by case basis which often requires thorough analysis of your and your partner’s respective situations including:

  • assets separately or jointly held by you and your partner at present;
  • current and future earning capacities;
  • whether you and your partner plan to have children;
  • any children from previous relationships;
  • whether you and your partner plan to acquire further assets; and
  • the chance of significant changes in parties’ financial positions in the near future, e.g. receiving inheritance, maternity leave etc.

Clearly, a financial agreement may not be suitable to everyone and you should obtain advice at the earliest possible opportunity if you have any questions.

Advice on your rights in Family Law

It is undoubtedly a stressful (and sometimes painful) experience for anyone to have to go through separation of a relationship.  It will go a long way to make that process much less stressful, and often less expensive, if you obtain sound legal advice with respect to your rights and responsibilities under the Family Law at the earliest possible opportunity.

In fact, wherever possible, it is preferable if you can give considerations to matters which may arise from your relationship in advance. If applicable, you may have to consider entering into binding financial agreement with your partner prior to a marriage or before commencing a de facto relationship.

For more information about financial matters, please see SEPARATION: PROPERTY.

For more information about children’s matters, please see SEPARATION: CHILDREN.

Advice on de facto relationship

Amendments to the Family Law Act and the Family Court Act (WA) mean that de facto partners are now being treated in the same way, and effectively have the same rights and responsibilities, as married couples.  Parties who separated from a de facto relationship are able to access the relevant Family Court with respect to both children’s matters and property matters.

When determining whether a de facto relationship exists between two people (including same sex couples), the Court looks at a number of factors which include:

  • the length of the relationship;
  • whether they lived in the same residence;
  • the nature and extent of their common residence;
  • the degree of financial dependence or interdependence;
  • whether a sexual relationship exists;
  • the ownership, use and purchase of their property;
  • the degree of mutual commitment to a shared life;
  • the care and support of children (if any);
  • how the public or others perceive the relationship.

It is a misconception that if the couple lived together for less than 2 years then they cannot be regarded as de facto partners. Although the length of the relationship is generally an important factor, it is not the only factor and the Court will consider all other relevant facts in determining whether a de facto relationship exists.

For more information about financial matters, please see SEPARATION: PROPERTY.

For more information about children’s matters, please see SEPARATION: CHILDREN.

Preservation of assets

In today’s commercial landscape, people often attempt to protect their family assets from claims by creditors in the event that their business adventures fail. This may involve setting up complex trust structures or transferring assets to various other legal entities, or sometimes it may involve registering family assets in the sole name of the “stay-home partner”. However, when arranging their financial affairs for the purpose of assets protection from third parties, people often overlook the possible ramifications these financial arrangement may have on their individual rights in the unfortunate event of a relationship breakdown.

This means obtaining Family Law advice, usually in conjunction with accounting advice, in advance may be vital to your assets preservation masterplan.

For more information about financial agreements, please see MARRIAGE/Pre-nuptial & Financial Agreements.