Financial Agreements (“Pre-nups”)
Financial Agreements (aka ‘Binding Financial Agreements’, ‘BFAs’ or ‘pre-nups’) are Agreements which set out what is to happen in relation to property settlement and/or spousal maintenance in the event of a relationship breakdown.
It is possible to enter into a Financial Agreement at the start, during or the end of a relationship. They can be used by people who are married or who are about to get married or who are in a de facto relationship (including a same sex de facto relationship).
A Financial Agreement at the start or during a relationship basically acts as an insurance policy. It can give you piece of mind so that you know that if something does go wrong and there is a separation, both parties are clear on what is to happen. We find that when parties enter into Financial Agreements, it can actually strengthen a relationship because it reduces the stress on the parties (and the relationship) by the parties knowing where they stand and they can plan accordingly.
A Financial Agreement is not about not being unfair, but it is about reducing the potential for a dispute (which is often the worst, and most costly, part of the separation) later on.
A Financial Agreement can protect your business, company(s) and Trusts(s) from a claim from your ex-partner. It can also be an important tool in estate and succession planning and protecting wealth of other family members if there are things such as trusts or businesses which several people are involved in.
Those embarking on a relationship, especially when there is a family wealth; issues of potential future inheritances; blended families; second relationships; or where there is a disparity between the parties’ financial circumstances should consider a Financial Agreement. Even once you are in a relationship it is still possible to enter into a Financial Agreement.
It is also possible to enter into a Financial Agreement once the relationship has come to an end, or where the parties have divorced. There are some circumstances when this may be appropriate and other circumstances in which we would advise against finalising matters with a Financial Agreement rather than Consent Orders.
A Financial Agreement is the only way to oust the Court’s ability to award spousal maintenance. Therefore depending on your circumstances, we can advise you on whether you should be entering into a Financial Agreement when the separation has already occurred as part of your overall method of formalising the agreement about financial matters.
There are a number of requirements which are necessary in order for the Financial Agreement to be binding. One of these requirements is that you and your partner must obtain specific independent legal advice prior to signing the Agreement.
We can assist you with any questions you may have in relation to Financial Agreements.
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