Considering financial agreements, aka prenup?
To protect your wealth as a spouse in Australia, consider drafting a financial agreement (prenup) that outlines property settlements and maintenance. Professional legal advice is crucial in creating a robust agreement to minimize the risk of it being set aside.
Childcare not included
Financial agreements help protect assets and property by setting terms for property settlements and maintenance, but do not cover childcare arrangements.
Maintaining due ownership
The division of assets generally involves splitting joint assets equally while maintaining individual ownership of assets brought into the relationship
What you need to watch out for
Agreements may be invalidated if there are issues such as inaccurate asset valuations, undue pressure, insufficient consideration time, or changes in family circumstances like having children
Previous stay-at-home pandemic restrictions has spiked up divorce and separation rates in Australia, putting marriage into looming situations. In worst-case scenarios, the stress aggravates even more when the spouses need to deal with property settlements and financial affairs.
The chances of gaining favorable results of a spouse’s effort to protect wealth upon separation may depend on a wide range of factors. Financial agreements (referred to as a prenup in some countries) guarantees effectively the assets and property as to how someone would like it to keep, contracting out the court’s ability of grant compensations following Family Law Act.
Financial agreements can protect assets and outline property settlements but do not cover childcare arrangements. Consult a lawyer to draft a robust prenup.
To ensure your prenup remains valid, avoid common pitfalls like inaccurate valuations and undue pressure; and seek professional legal guidance.
What am I allowed to include in my financial agreement?
- Financial agreements can only deal with property settlement and maintenance, and doesn’t deal with children’s care arrangements.
- The wealthier spouse will pay the other spouse following a sliding scale of entitlements depending on the duration of relationship. (E.g $30, 000 for six years, $40,000 for seven years)
- Assets that are accumulated in joint names during the relationship will be equally divided, while any assets a spouse bring during the relationship remain solely on their own in the events of divorce / separation.
- Certain events can end the agreement, such as when couples live together for 10 years, or when couples have had a child. Agreements that are ineffective may be set aside and could arise from a couple of reasons:
- Inadequate or inaccurate estimate value of a party’s own asset. Insufficient balance sheet and recorded documents may also contribute to the possibility of agreement being set aside.
- If the wealthier spouse is not open to negotiations, or putting the other party into great pressure by forcing to sign the agreement.
- The financially weaker spouse wasn’t given enough time to consider the agreement.
- The couple have had children since the making of the agreement.
