Family Law – Financial Agreements were introduced into the Australian Family Law System in 2002 and now have applicability across all relationship breakdowns in Australia.
What is a Financial Agreement?
A Financial Agreement is an agreement between two parties to a relationship (either marital or defacto in nature) which can be made at three distinct stages of the relationship. A Financial Agreement can be made before a relationship commences (a pre-nuptial type agreement), during a relationship or after a relationship has come to an end.
A Financial Agreement allows parties to a relationship to decide how their assets will be split upon a relationship breakdown, which has the obvious effect of ousting the jurisdiction of the Family Court, thereby avoiding the inherent legal cost and uncertainty that comes with any Family Court litigation.
As a result of the Family Court being removed from any involvement in the parties’ affairs at the time of relationship breakdown, the Parliament through the legislation has required that the parties in making a Financial Agreement are required to abide by a number of steps ensure that the Financial Agreement when made is binding. In this respect this Agreements are often referred to as Binding Financial Agreements or BFA.
The steps involved include requiring the parties to obtain independent legal advice as to the advantages and disadvantages of entering into the agreement.
The Financial Agreement has since 2002 become an essential part of Family Law estate planning – it has particular relevance for those persons seeking to quarantine assets that they are introducing into a new relationship to ensure that children of a previous relationship will continue to benefit.
For more information on Financial Agreements please contact Jeremy Culshaw, the Legal Practice Director at Culshaw Miller Lawyers, an Accredited Family Law Specialist with 27 years experience in the practice of Family Law.