Financial Agreements

Family law disputes are usually complex, often difficult to manage and generally a costly process. These days families come in all shapes and sizes and at some stage in your life, you may require advice from a family law specialist. Financial agreements are a way of avoiding costly (and often stressful) family disputes.

“Pre-Nuptials” and Financial Agreements

Financial Agreements, also colloquially known as “prenups”, can be useful as a risk management tool for couples seeking to document how they will divide their property if they separate at a later time. It allows a private agreement to be formalised and precludes the later involvement of the Family Court. Having such an Agreement can therefore save a significant sum of money, including the costs associated with property settlement negotiations or litigation if the couple separate. It can be compared to income protection insurance or life insurance.

Financial Agreements can be particularly useful for:

1.    Mature couples with significant assets who have been previously married or been in a previous relationship and who are now entering into a new relationship. These couples may have children from previous relationships for whom they wish to protect their future inheritances;

2.    Young couples who are likely to be gifted or inherit significant wealth from their parents;

3.    Relationships where there are significant differences between what each party is bringing into the relationship.

There must be strict compliance with the legislation and there cannot be any form of duress applied towards a party to the Agreement. The parties must have provided each other with full disclosure of their financial circumstances. Each party to the Agreement must have obtained independent legal advice before signing the Agreement. People with complex business structures need to take particular care that they consider problems under any commercial contract with third parties. They also need to seek taxation advice as to any taxation implications. It is advisable for parties to review their overall financial planning or succession planning strategy when considering entering into a Financial Agreement.”

If you require family law advice or would like to set up a financial agreement contact JBS as we work with a number of family lawyers who would be happy to help.