It is becoming more common in Australia for couples to enter into pre-nuptial agreements under the Family Law Act, particularly where they are bringing substantial assets into the relationship. Sometimes this is a result of the parties entering into a relationship after the failure of a previous marriage but many people now marry later in life and have accrued substantial assets which they may not want to be dissipated if the new relationship fails.
For many, the thought of a pre-nuptial agreement is somehow distasteful but with more than one in three marriages failing it makes good sense to have a contingency plan.
Since December 2000 it has been possible to make binding financial arrangements under the Family Law Act in case of a marriage breakdown. Such agreements can cover financial settlement, financial support and any incidental issues. ‘Incidental’ issues are typically issues which have a sufficient connection with the subject of property division or spousal maintenance during marriage and/or after dissolution. For example, the payment of one spouses' credit card bills or the contribution to the education costs of a child or stepchild would be matters incidental to spousal maintenance during marriage.
For a binding financial agreement to be legally binding both parties must have signed the agreement and have received legal advice before signing.
In order to ensure the agreement is valid the Family Law Rules stipulate that both parties must make a full and frank disclosure of all assets, liabilities, income and resources.
If this is not the case then a court can choose to set aside any agreement and make alternate orders.
There can be tax advantages to entering into a financial agreement. For example, if property is transferred as the result of a financial agreement then stamp duty is generally not payable on the transfer.
Southern Legal offers a Cohabitation Agreements Module that can be used by couples not only before entering into a marriage but also during the marriage itself.
The work we undertake in this module includes but is not limited to:
- Attending upon you, either in our office or by teleconference, to provide advice and accept instructions and to confirm that you and your partner have agreed, or substantially agreed, on the division of the relationship assets and liabilities should your marriage fail.
- Preparing our Costs Agreement and Disclosure as required under the Legal Profession Act and confirming in writing our instructions to act for you.
- Sending Information Request Forms to both parties under the rules of full financial disclosure set down in the Family Law Rules 2004. These forms will have detailed information as to what you must both provide by way of financial information.
- Receiving your returned financial disclosure documentation, compiling a Balance Sheet and Schedule of Assets and Liabilities.
- If there is any dispute over the valuation of assets we will hold a short mediation to try and overcome the difference of opinion. If this is not possible we will advise on the appointment of an agreed valuer whose decision is to be final as to the assets value. The cost of the valuer’s services is a disbursement and is not included in Southern Legal’s fee for the module.
- Perusing any valuations and making adjustments to the Balance Sheet and Schedule.
- If relevant, we will make enquiries with any superannuation fund to determine the value of each party’s superannuation interests. If a formal valuation of those superannuation interests is required the cost of the Form 6 (which varies from fund to fund) is a disbursement and is not included in Southern Legal’s fee for the module.
- Confer with you and your partner either in person or by teleconference to finalise the settlement agreement once all valuations and superannuation information is received.
We will prepare the draft Financial Agreement and give a copy to your partner and yourself for perusal. If necessary we will make any final adjustments required you request.
Your partner will need to attend on an independent lawyer with a copy of the Agreement to obtain a Certificate of Independent Legal Advice. We can assist with this process by way of a referral.
Once we have the duly signed documents we will prepare the final copies and provide certified copies for each party and will enter the original documents into Safe Custody.