Pre Nuptial and Binding Financial Agreements

You must be aware that the introduction of the topic of entering into a Binding Financial Agreement in a relationship can spark feelings of shock, hurt and distrust. Therefore, we strongly recommend that you call one of our family lawyers to obtain their advice prior to discussing it with your fiancé or intended partner. You must be aware that in order to have an effective Binding Financial Agreement there has to be complete disclosure of each party’s financial situation. You also have to obtain advice as to whether entering into the Agreement is at all appropriate. Our lawyers will tell you frankly whether a Binding Financial Agreement is appropriate in your circumstances.

If you want personal attention and sensitive consideration of your needs then you should call us and speak to one of our team of family law experts. We have the experience to appreciate the emotions that the suggestion of this agreement may generate but if you agree to enter into the agreement then our lawyers have the professional skills to negotiate and draft the property documents.

These agreements exclude the Family Court being able to deal with the matter when you ultimately separate. They are contracts signed by each party which say exactly what the parties want to happen to their assets should they separate. They usually set out the parties’ assets and liabilities at the date of marriage and how they seek to have their pre-marriage assets divided if the marriage were to come to an end. These agreements are more common amongst parties who are entering into a second marriage or who own assets prior to the marriage and want to keep those separate.

These types of agreements are twofold:

1. During the marriage and prior to any separation
   Sometimes parties want to set out their financial positions being their rights and responsibilities if they were to separate ahead of any separation. This is obviously a ‘hard sell’ to your spouse. Clearly if you wanted to do a document that anticipated a separation was to occur then your spouse is unlikely to sign it, as they may very well get more of the assets if they didn’t sign the document.
2. During the marriage but after separation.
   This is the most common type of Financial Agreement. It is simply a settlement document which is binding on both parties that provides for the division of your property. Commonly parties enter into a Financial Agreement that covers spouse maintenance which states that neither party will make a claim for spouse maintenance in the future. The only way to contract out of spouse maintenance is by a Binding Financial Agreement. You should discuss with your lawyer whether you are vulnerable to a claim, or whether you have a claim for ongoing maintenance from your spouse.

These can be entered into once parties have obtained a divorce. The matters to be dealt with are identical to those that you would deal with if a Binding Financial Agreement was entered during marriage.

These are set out as Financial Agreements similar to the ones listed above.

Basic criteria for Financial Agreements to be binding are:

1. The Agreement must be in writing;
2. The Agreement must be signed by all parties;
3. Each party to a Financial Agreement must have obtained independent legal advice before signing the Agreement;
4. The Agreement must contain a statement to the effect that each parties lawyer has provided the person with advice as to the effect of the Agreement on the rights of that party and the advantages and disadvantage at the time the advice was provided to the party of entering into the Agreement.
5. The statement referred to in 4 above must be given to both parties to the Agreement.