Individuals can enter into a Binding Financial Agreement at different stages of
their relationship:
A Financial Agreement can deal with how property and superannuation is to be split
up in the event of separation. The idea of entering into a Binding Financial Agreement
is to agree before the relationship has broken down how the assets are going to
be divided up in the case of a separation. It avoids parties going to Court later
and allows parties to know ahead of time how their property settlement will be handled.
It also helps to be able to ensure that certain assets are not included in the property
pool. The Agreement can also provide for the payment of spouse maintenance.
Financial Agreements are contracts, signed by each party and provide for how the
parties want to divide their assets in the event of separation.
Financial Agreements before Marriage or Cohabitation
This type of agreement is entered into when a couple decide that they want to clarify
the division of their assets prior to marriage (pre nuptial agreements) or living
together. These agreements set out the assets and liabilities of the parties at
the date of the marriage or relationship commencing, and states how they want those
assets to be divided and what will happen to the assets acquired during the marriage
or the relationship.
These agreements are common between parties who are living together and who are
entering into a second marriage, or who own assets prior to marriage, and want to
keep those assets separate to their partner’s assets.
Financial Agreements during Marriage or Cohabitation
Couples can enter into a Financial Agreement while married or living together. This
sometimes occurs when the parties decide during their relationship that they want
to set out their financial rights and responsibilities in the event they were to
separate in the future.
It can also be entered into when the parties are separated, but before they are
divorced. The agreement can provide for how the assets and liabilities including
superannuation will be divided. The Agreement can also deal with spouse maintenance.
Financial Agreements after Divorce or De Facto Relationship breakdown
Financial Agreements can be entered into after the parties have obtained a Divorce
or separated after being in a de facto relationship. These agreements are used for
parties to decide how to divide their assets.
Each party to any of the above types of Financial Agreements must obtain independent
legal advice and the agreement must contain a statement from the lawyer confirming
that the lawyer has advised their client, independently of the other as to effect
of the agreement on the rights of that party; and the advantages and disadvantages,
at the time that the advice was provided, to the party of making the agreement.
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