A binding financial agreement, or prenup, is a legal document that sets out how your property, assets and finances will be divided after a divorce or separation. It’s a great way to reduce the cost and stress associated with the end of a marriage or a relationship, and to ensure that you don’t need to go to family court to defend your interests.
To help you get an idea of what these agreements can cover we’ve taken a closer look.
What do binding financial agreements cover?
Broadly speaking binding financial agreements cover two main areas:
- Financial settlement and division of property.
- The financial maintenance of one spouse to be provided by the other.
It’s important to note that whatever is put in a binding financial agreement is not automatically legally binding. In fact, binding financial agreements must be carefully prepared by an experienced family lawyer then regularly updated to ensure that they are legally enforceable.
They can be entered into before, during and after entering into a de facto relationship or marriage.
What property can be included in a binding financial agreement?
In most cases any property that you own can be included in a binding financial agreement. That includes property or financial assets that you do not yet own but expect to receive, such as an inheritance or gift.
This could include superannuation, real estate, investments, bank accounts, vehicles, boats, art, insurance policies, debts and anything else of value.
What spousal maintenance should be included in a binding financial agreement?
A binding financial agreement can include spousal maintenance to provide certainty to both parties and limit recourse through court after a relationship ends. Your agreement should include:
- How maintenance will be paid – in lump sum or instalments.
- The amount to be paid and for how long.
- What form the spousal maintenance will take (i.e. in cash, investments or property).
- What happens if your ex-partner enters a de facto relationship.
While spousal maintenance can be included in binding financial agreements, child support and financial arrangements for children should not. Consent orders are a different type of agreement that can include childcare arrangements – for more on consent orders click here.
How can I make sure my binding financial agreement is enforceable?
Binding financial agreements have been set aside by family courts in the past, so when preparing yours it’s essential that you take the utmost care. First and foremost you must have yours prepared by an experienced family lawyer to meet the following criteria:
- In writing and signed by both parties.
- A statement by each party that they received independent legal advice prior to entering into the agreement.
- A statement by the relevant legal practitioners confirming the legal advice was given (a copy of which must be given to the other party).
Most importantly both parties must enter into the agreement of their own free will and neither party can have acted fraudulently or signed under duress. Last of all, binding financial agreements must be updated every 2-3 years or when there is a change of circumstances (such as a new child) to ensure it remains binding.
Get help from an experienced family lawyer
Binding financial agreements can be complex and confusing but they don’t need to be. To protect your wealth, your family and gain peace of mind, create yours with the help of an experienced Melbourne family lawyer.
Get in touch with Testart Family Lawyers today and book your first consultation free.