How do you settle property matters? A crucial part of relationship breaks is the division of assets. It’s essential to apportion property fairly to protect
Financial agreements Sunshine Coast
"A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life."
- Suze Orman
What is a financial agreement?
A financial agreement binding two parties sets out how they would like to divide their finances if the relationship ends. For those looking to enter financial agreements, family law regulates their implementation. Under the Family Law Act 1975, you can enter into a financial agreement before, during, or after your relationship ends. Financial agreements can cover a married couple or a de facto relationship.
What’s in a financial agreement?
As a family law matter, there are vital prerequisites for creating Binding Financial Agreements (BFA’s). Every lawyer must sign a certificate of independent legal advice. This certificate indicates that the client has been advised of the agreement’s effect. Both parties should understand the advantages and disadvantages of the contract.
Spouse maintenance matters arising from divorce can also be dealt with in these agreements. If the parties wish, the agreement can indicate that neither party will claim spousal maintenance against the other. A binding financial agreement does not require the Court to oversee the contract terms. This allows you and your ex-spouse to arrive at an outcome without the Court intervening.
Obtaining independent legal advice from an experienced family lawyer before entering any financial contract is essential. Poorly drafted agreements can be disastrous and often go hand-in-hand with unreliable family law advice. Ineffectively structured agreements often lead to later litigation. This leaves parties out of pocket and open to interference by the Courts. Shanahan Family Law can give vital and tailored advice about your circumstances. We will ensure a complete and final property settlement.
What’s in a financial agreement
Asking the questions
There are significant and exacting conventional prerequisites for the creation of Binding Financial Agreements (BFA’s) also known as prenups. Every lawyer must sign a certificate of independent legal advice indicating that advice has been given concerning the effect of the agreement and the advantages and disadvantages of it.
Spousal maintenance can also be dealt with in these agreements or, if the parties wish, the agreement can indicate that neither party will make a claim for spousal maintenance against the other. Entering into a binding financial agreement effectively removes the authority with jurisdiction of the Court, allowing you and your ex-spouse to arrive at your own outcome without the court intervening.
Getting expert family law guidance about prenups and spousal maintenance is essential. Poorly or inadequately drafted agreements can be disastrous and often go hand-in-hand with unreliable family law advice. Ineffectively structured agreements often lead to later litigation, leaving parties fundamentally out of pocket and exposed to unwanted interference by the courts. Shanahan Family Law can give vital, bespoke advice about your circumstances to ensure a full and final property settlement.
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Frequently Asked Questions
What can a financial agreement NOT include?
In Australian law, there are certain matters that a divorce financial agreement cannot cover:
- Parenting Arrangements: Financial agreements cannot dictate parenting orders or custody arrangements.
- Child Support: Child support falls outside the scope of these agreements. A child support agreement is more appropriate to organise support payments.
- Personal Non-Financial Matters: Issues like marital conduct or personal obligations aren’t appropriate for inclusion.
- Anything Unlawful: Any terms that promote illegal activities or are against public policy are void.
- Future Assets: Speculative assets or those not yet acquired generally won’t be included. A typical example is a future inheritance. The inheritance isn’t in the party’s possession when the financial agreement is made. As a result, it isn’t considered property for a property settlement.
- Violations of Third Party Rights: The agreement cannot infringe on the rights of third parties. Some circumstances where a third party’s interests may be affected include the following:
- Joint Debts: If a couple has joint debts with a third party, an agreement that doesn’t adequately address repayment might affect the third party’s financial interests.
- Business Partnerships: If one spouse is in a business partnership, an agreement that transfers assets or shares without considering the partnership agreement can impact the partner’s rights.
- Family Trusts: If assets are held in a family trust, an agreement that seeks to divide or access these assets might conflict with the interests of other beneficiaries.
- Guarantors: If a third party has guaranteed the couple a loan or financial commitment, an agreement that changes the responsibility for that loan might affect the guarantor.
- Real Estate Co-ownership: If a property is co-owned with a third party, an agreement that changes ownership rights without the third party’s consent can create conflicts.
- Shared Investments: If the couple has investments with third parties, an agreement that liquidates or transfers those investments can impact the third party’s financial position.
Are Financial Agreements the Only Option?
Financial agreements are a central component of family law. They offer couples a pathway to outline their financial future. However, they aren’t the exclusive choice. While financial agreements provide clarity, there are alternatives. For example, consent orders are available for parties to consider.
What are the Consequences for Breaching a Binding Financial Agreement?
Breaching a binding financial agreement can lead to significant repercussions. Such violations might result in court interventions. This will lead to accumulating legal fees and potential financial penalties. Fully grasping these implications is vital before committing to such an agreement.
What are the Consequences for Breaching a Binding Financial Agreement?
Breaching a binding financial agreement can lead to significant repercussions. Such violations might result in court interventions. This will lead to accumulating legal fees, and potential financial penalties. Fully grasping these implications is vital before committing to such an agreement.
Can Anything Invalidate a Financial Agreement?
Certain factors, such as fraud and undue influence, can invalidate a financial agreement. If a party is deceptive about their financial resources or exerts pressure on the other to sign, the agreement might not be legally binding. Securing independent legal advice is crucial to ensure the agreement’s integrity.
If assets are concealed or if misleading financial information is presented by one party, the agreement can be contested. Undue influence pertains to coercive actions that unwillingly compel a party into an agreement. Both scenarios can void a financial agreement.
Can We Make an Informal Property Agreement?
Parties can draft informal arrangements concerning property division after a relationship’s dissolution. However, these are less robust than binding financial agreements. Formalising any agreement is recommended for those in de facto relationships or marriages. Doing so will ensure its recognition under the Family Law Act.
Navigating these agreements requires expert legal advice. Consulting experienced family lawyers is essential when contemplating a financial agreement. They can advise on spousal maintenance matters, the technical requirements, and their implications. An adept family lawyer ensures the agreement safeguards assets acquired during the relationship and addresses spousal maintenance adequately.
Related Financial Agreement Articles
Ending A De Facto Relationship Explained Even though de facto couples aren’t legally married, they have a similar status under the Family Law Act 1975.
6 Property settlement red flags you should avoid Whether you are in the process of a divorce or ending a de facto relationship, finalising a
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