If you are living in Australia, 32% of marriages end in divorce.
Preparing for the worst is not just a smart idea. It is a necessity in today’s day and age. No one own’s a crystal ball to determine what relationships will and won’t last.
Financial agreements are an effective strategy for both defending your assets and dissolving future conflicts.
A financial agreement deals with the division of property, money and other assets. It can also be a guide for how debt is to be covered by the parties.
A financial agreement may also include the parties’ agreement on child maintenance, child support and spousal maintenance.
Superannuation and claims on the other party’s estate after death are also other elements that can be covered in a financial agreement.
The different types of financial agreements depend on the type of relationship you have and at what stage you are making the financial agreement:
When you separate from your partner, you need to finalise the division of property between you.
A financial agreement is a contract between two parties.
Consent Orders are stamped and approved by the court. You can find out more about Consent Orders HERE.
Both are legally enforceable. You will need to ensure that the financial agreement complies with the below conditions to make sure it is binding on both parties.
There’s not much point preparing a document that isn’t going to be binding on both parties. You want to ensure that your assets are protected and you don’t want to experience any expensive divorces, therefore you must ensure that you follow the strict protocols when drafting the financial agreement. Your Financial Agreement may not be legally binding on both parties and most noteworthily, it could leave you exposed to a potentially expensive lawsuit. Here are 5 simple rules to ensure that your financial agreement is binding:
1 – The document is signed by both parties;
2 – Each party has received independent legal advice;
3 – A statement from each party’s lawyer advising them of the advantages and disadvantages of signing the financial agreement. This statement needs to be attached to the agreement.
4 – Once signed, one party keeps the original agreement & the other party will keep a certified copy.
5 – A declaration of separation must be signed. This needs to contain 3 things: That the parties have separated. That there is no reasonable likelihood for you to reconcile. That the relationship will not restart at any point.