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