Prenup Lawyers Sydney

Binding financial agreements are also referred to as financial agreements, pre-nuptial agreements (prenups), post-nuptial agreements (postnups) and cohabitation agreements. As the names suggest, they may be made before marriage, during a relationship, or after a marriage or relationship ends. Financial agreements state how the parties’ financial resources, liabilities and assets will be dealt with if or after they separate. They may also contain provisions regarding financial support (maintenance) by one partner for the other.

How is a Binding Financial Agreement made?

A valid financial agreement must comply with strict requirements set out under the Family Law Act 1975. The agreement must be in a specific format and contain certain acknowledgements. Each party must obtain independent legal advice and the agreement must be correctly signed by the parties and their respective lawyers.

Financial agreements are not approved or registered by a court but may later be enforced provided they have been correctly prepared and there are no circumstances existing that would otherwise make them void. A court may set aside a financial agreement in certain circumstances, for example, where the agreement was obtained by fraud or duress.

What can be included in a Financial Agreement?

A financial agreement sets out how the parties’ financial resources, liabilities and assets will be dealt with after separation, whether the separation is unforeseen at the time of making the agreement, or after a couple has already separated.

The provisions may deal with the ownership of respective assets, the closing of bank accounts, the payment of money by one party to another within a particular time, how assets should be valued, the sale of a home and distribution of sale proceeds, etc.

The agreement operates like a legal contract between the parties – each person must perform their obligations under the contract and the parties must act reasonably and in good faith to fulfil the terms of the agreement.

Financial Agreements made before separation

Financial agreements that are made during or when a relationship commences enable couples to agree in advance on an acceptable division of assets if their relationship ends sometime in the future. In doing so, they opt out of the usual court processes for dividing property.

Whether you are entering a new relationship or are already in one, and are conscious about retaining your respective assets, you and your partner may consider entering a financial agreement. The agreement can help provide certainty about what will happen to your respective property if you and your partner later separate. The agreement can protect assets existing prior to the relationship (particularly important if you have children from a previous relationship), outline what is to happen with an inheritance, or could prevent a business from closure if a relationship ends.

Financial Agreements after separation

If you have separated from your partner and have reached an agreement regarding the division of your assets and liabilities, you may choose to enter a financial agreement to formalise your affairs.

Alternatively, your agreement can be documented in “consent orders”, which must be approved by the Federal Circuit and Family Court of Australia, and may be considered a more formal way to finalise your property affairs after your relationship ends.

It is essential to understand the effect of a financial agreement, and whether this is the best way for you to deal with your property affairs. We can discuss your circumstances so you can make an informed decision about whether a financial agreement is right for your needs.

If you need assistance, contact [email protected] for expert legal advice.