In Australia, parties of a relationship or a marriage may enter a Financial Agreement (“FA”) for the same purpose as entering into a pre-nuptial agreement or “pre-nup” as they are commonly referred to.
Clients may choose to enter into a FA in order to document an agreement about the division of property in the event of separation. At Tolcon Legal we are experienced in drafting common sense FAs which provide certainty to both parties and ensure the rights of our clients are protected.
The major benefit is to minimise the risk of possible future litigation, and therefore lessening the financial and emotional stress associated with the breakdown of the relationship.
Clients who have entered into a relationship with significant assets, or who may expect to inherit significant assets, are encouraged to contemplate a FA in order to ensure their financial security.
In essence, a FA ousts the jurisdiction of the Family Court to the extent that is it covered in the agreement. For this reason, FAs are often complex and subject to a number of legal requirement. For example, both parties to an agreement must obtain independent legal advice and a certificate of legal advice must be annexed to the agreement.
It is important to understand that while a FA will minimise the risk of possible future litigation, if it later comes to light that one party had deliberately concealed assets, this could provide grounds for challenging the FA in the Family Court.
If you would like with further advice in relation to the advantages and disadvantages of a Financial Agreement and what effect it may have on your rights and entitlements, make an appointment to speak with one of our team.
In Family Law disputes, the vast majority of matters are settled by negotiations and the process of offers and counter offers between parties and their lawyers.
At Tolcon Legal, we insist that our clients document every agreement with precision, setting out the what is required, when, where and by whom. By doing so, we are protecting our client’s rights into the future.
When matters are agreed without the need for a contested hearing, there are two ways to document that agreement.
The first option is by a Financial Agreement (“FA”). This may be entered into before or at any stage of negotiations or court proceedings.
To be binding, a FA must be in writing and signed by both parties with a certificate of independent advice by both parties’ legal representatives. This means that both parties must have independent legal advice.
Tolcon Legal has ongoing professional relationships with other boutique Family Law firms who we refer spouses to in these circumstances.
Advantages of a FA as a way of documenting an agreement include:
A FA may, however, be set aside by the Court on the grounds of fraud. For example, if one party failed to disclose assets or liabilities at the time the agreement was made the agreement can be terminated.
The second option is by the making of Consent Orders. Like a FA, consent orders set out an agreement to a property settlement. An application for Consent Orders must be made to the Court who review the parties’ assets and liabilities and ensure that the agreement is just and equitable and within a range of likely entitlements. Consent Orders will only be made with the discretion of the judicial officer.
In order to be binding, each party must make full and frank disclosure of their assets and liabilities. Consent Orders can be made for both property and child-related matters. An advantage of Consent Orders is that they preserve a party’s rights to bring an application at the Family Court in the future, if necessary.
Our experience tells us that the most persuasive argument for documenting an agreement, even if it has been implemented, is that a party may simply change his or her mind.
If down the track one party becomes aware of hidden assets that were relevant at the time of separation, that party will need to seek special leave to apply to the Court for a remedy. This may be years after the event, when memory has faded and evidence is no longer accessible.
Superannuation is an important financial resource for married parties in the context of a property settlement.
Our team can help to determine what superannuation each party holds and with what fund. In most circumstances, it is appropriate to split one party’s superannuation to the other party. This is called a “superannuation splitting order”.
While this is a common occurrence in Family Law, there are rules and regulations which must be complied with in order for such an order to be binding upon the superannuation fund’s trustee.
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