Binding financial agreements are recommended
in 2 situations:
1. Where a couple (in an existing relationship or intending
to enter into a defacto relationship or marriage) wish to
agree about how they will divide their property if they
separate. (These agreements are often called a “prenuptial
agreement” or “cohabitation agreement”.)
2. Where a couple have separated and they have agreed on
their financial arrangements and they wish to formalize this
agreement in a binding way.
If a couple does not have a Binding Financial Agreement and
they separate, their property will be divided in accordance
with the principles in the Family Law Act, and this usually
means that all of the property of the parties at that time
is included. Having an agreement will mean that the Family
Law Act will not apply; the provisions of the agreement
will. Therefore having such an agreement can save a
significant sum of money including the costs associated with
property settlement negotiations or litigation. It can be
compared to income protection insurance or life insurance.
A Binding Financial Agreement precludes the Family Court
from determining a dispute between the couple about a
division of their property. Such agreements set out how the
parties’ property, liabilities and financial resources will
be divided if they separate.
These agreements are often used where one party has
significant property and wishes to keep some of it separate
from the other party for example for future estate planning
for children.
For these agreements to give a couple the protection they
seek when they enter them they must be done properly and
strictly in accordance with the legislation. Each party to
the Binding Financial Agreement must have obtained
independent legal advice and must contain a certificate from
the legal practitioner confirming that the practitioner 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.
People with complex business structures need to take
particular care that they consider potential problems under
any commercial contract with third parties. They should also
seek advice as to the revenue implications including stamp
duty and tax. Other structures or documents may need to be
reviewed as an overall financial planning or succession
strategy.
Murdochs does not “run these agreements out” for a fixed
fee. To ensure that the agreement addresses the couple’s
actual circumstances, is clear and unambiguous and likely to
be upheld by a court if later disputed we charge our normal
hourly rate for the actual time spent for the important
legal work involved.
WHERE TO NOW?
If you would like to speak with an expert to discuss your
family law issue, please call us on (07) 3007 9898 or send
us an email at
enquiry@murdochs.com.au