Pre-nuptial and Cohabitation Agreements

08 May 2009

PDF Download

This article is available in PDF format.

pre-nup.pdf [Adobe Acrobat PDF - 609.1 KB]

Protecting your assets and wealth

When you buy a new home, you don’t expect it to burn down. But you know this is a risk. So you take out insurance, to protect yourself - just in case. Similarly, when you enter into a relationship, you intend it to be lasting. But we know the reality is, despite everyone’s best intentions, many relationships do not last. A separation may occur because of something beyond your control.

So perhaps you should also take out “insurance” in the form of a Financial Agreement, to protect yourself – just in case. An increasing number of couples are doing just that.

What is a Financial Agreement?

Essentially, a Financial Agreement is a document which sets out what will happen ﬁnancially if a married or de facto couple separates. Commonly, people refer to these sorts of agreements as ‘pre-nuptial agreements’ or ‘cohabitation agreements’.

What issues can be covered by a Financial Agreement?

The agreement can deal with:

The division of assets such as your home, business, investment property, shares, bank accounts and artwork.
The division of superannuation.
Whether any maintenance will be paid from one partner to the other. This is separate from Child Support.

Are Financial Agreements for everyone or just the rich and famous?

You don’t need to be rich and famous to have a Financial Agreement. Financial Agreements are becoming increasingly popular with people in many different ﬁnancial and personal circumstances. It’s not just about protecting yourself – other family members may also need protection.

A Financial Agreement could be beneﬁcial if:

You already have signiﬁcant assets. You might be happy for your partner to enjoy those assets while you are in a relationship with them, but may want to keep those assets for yourself if you separate.
You have received an inheritance or expect to receive an inheritance. An agreement may provide for you to keep any inheritance you receive.
You own a business. It may be important that the business remains intact if you separate so that it can continue to generate an income.
You have children from a previous relationship. An agreement can protect your assets and wealth for your children if you separate.
Your income is much higher than your partner’s income. You may want any division of property to reﬂ ect your greater ﬁnancial contribution.
Your partner has debts. An agreement can provide that you are not responsible for those debts if you separate.
Your parents have given you money or assets. An agreement can ensure that, if you separate, you beneﬁ t from your parents’ generosity, not your partner.
You are giving up your job to have children. If you separate, you will need enough money to re-establish yourself.
You have an aged parent or disabled child to care for. You may want to make sure that you will have enough ﬁnancial support to continue caring for them.
You want to avoid a costly and stressful legal dispute about ﬁnancial matters if you and your partner separate.

What if you are already married or already in a de facto relationship?

Financial Agreements can be entered into:

Before you start living together in a de facto relationship;
While you are living together in a de facto relationship;
Before you get married; or
While you are married. If you separate, a Financial Agreement can also be entered into after separation to ﬁnalise your property settlement.

What if you are in a same sex relationship?

The provisions for de facto partners apply equally to same sex and opposite sex couples.

Are Financial Agreements binding?

Provided that legislative requirements have been complied with Financial Agreements are binding. They can only be set aside by the Court in limited circumstances.

Further advice?

If you think a Financial Agreement could beneﬁt you, contact Holding Redlich to obtain expert advice from our family lawyers. For an initial appointment, telephone 9321 9771.