It is possible for couples (under the Family Law Act, for married people, and under the Property [Relationships] Act, NSW for defacto or same sex couples) to enter into an agreement which set out what will happen to all property in the event that the relationship comes to an end.

An agreement can be entered into:-

• prior to marriage, or the couple commencing to live together;
• during the marriage, or during the period of residing together;

Entering into an agreement before marriage, or before you start to live with someone (or even after you start living together in a marriage or otherwise) should be looked on as a form of insurance to protect your assets against the failure of your relationship in the future.

Most people would have no hesitation in obtaining insurance to protect the value of their car, or their income, or their home contents in the event of a disaster happening which destroys or diminishes the value of those assets. In a very similar way, a Binding Financial Agreement (as the document is known under the Family Law Act) or a Domestic Relationship Agreement (as it is known under the Property (Relationships) Act) can protect property and assets owned by a person at the commencement of a relationship from being diminished or lost in a disputed claim with their partner if that relationship fails.

If a separation does occur, then having a Financial Agreement in place can prevent the financial and emotional disasters which can often follow a separation between couples.

Many people these days are entering into second or third marriages or subsequent relationships and are bringing with them assets such as houses, cars, superannuation, shares or savings. In order to safeguard those assets, a Financial Agreement might include, for example, a clause which protects the assets owned by each person at the beginning of the relationship from any claim by the other person in the event of a separation. Similarly, a couple may also decide that the agreement should include a clause which allows for all property acquired jointly during the relationship to be divided equally in the event of a separation.

If the couple comply with the formal requirements of making a Financial Agreement under the appropriate Act (generally this means that each party must have independent legal advice), then their agreement as to how their individual and joint assets should be divided will be legal and binding on both partners if the relationship fails.

Unless a person is able to prove they were forced to sign the agreement under some threat, or that the agreement is fraudulent, Courts will be prevented from ordering a division of those assets listed in the agreement, other than the way in which the parties agreed, at the beginning of their relationship, those assets would be divided.

Even if an agreement is not entered into before or during the relationship, couples can always reach an agreement after separation about how all property and other items should be divided. Under the Family Law Act, such an agreement is still known as a Binding Financial Agreement. For defacto or same sex couples, the agreement is known as a Termination Agreement.

FURTHER INFORMATION 

This Information Outline is provided courtesy of Turnbull Hill Lawyers who are experienced in this area of law. They are located at the Charlestown Commercial Centre 29 Smith Street Charlestown NSW 2290 or you can call them on (02) 4943 3822 if you would like more information on the legal topic, or you wish to obtain formal advice regarding your situation.

For 35 years the team at Turnbull Hill Lawyers has fought to get the best outcomes for our clients. Our firm's success has always been based on giving personal attention to the details of every matter by a dynamic team of lawyers and paralegals dedicated to ensuring complete satisfaction of every client. This is why our lawyers continue to achieve top results for our clients. Underwriting the firm’s success is the fact that Turnbull Hill Lawyers has been retained by thousands of clients as a result of word-of-mouth referrals over the years. This is just one of the many powerful reasons you should choose Turnbull Hill Lawyers. For more information visit our website at www.turnbullhill.com.au.