A financial agreement provides the couple with the knowledge that if they separate, the division of their property has already been arranged. The best advantage is obtained from a well drafted financial agreement which has been prepared after proper consideration on the part of the parties to the agreement

Common reasons for considering a prenuptial agreement include:

• ownership of a successful business;
• having a high level of wealth;
• having children from a previous marriage;
•  having elderly parents;
• anticipating a sizeable inheritance;
• having sizeable debt;
• pursuing a lucrative career;
• ownership of stock, a home or retirement fund; or
• avoiding a costly divorce.

Financial Agreements can regulate financial arrangements between married couples, de facto couples and same sex couples.

Financial agreements are binding and enforceable, but only if they are made in a way that follows the procedures required by the Family Law Act.

Financial agreements describe how the property and financial resources are to be divided between the parties if they separate. The agreement may provide for the maintenance of one or both parties.

The agreement must be in writing and signed by each of the parties. It is necessary for each party to have obtained independent legal advice before signing the agreement.

Financial agreements can be terminated by written consent or set aside by a court.

The Family Law Act provides for binding financial agreements to be made between parties to a marriage, a de facto relationship or a same sex couple. These agreements can be made before, during or after the end of the marriage or relationship. Parties entering into a relationship agree what will happen in the event that they separate. Parties entering into a second relationship or with substantial assets often like the protection of a financial agreement.

Financial agreements can be classified into three categories:

1. Binding Financial Agreement (commonly referred to as a pre-nuptial agreement (entered into before or during the relationship) – s 90B,

2. Binding Financial Agreement during marriage – s 90C and

3. Binding Financial Agreement after divorce – s 90D.

If you have to an agreement without obtaining independent legal advice, remember that you should find out what your legal entitlements are before you sign anything.

Gaining knowledge on your legal entitlements will help you to make an informed decision before you enter into a binding agreement.

A qualified lawyer can draft the agreement for you. This will ensure that the agreement covers all legal issues, particular those you may not be aware of. A properly drafted agreement will help to ensure the agreement is binding.