Divorced Once
DIVORCED ONCE, IM NOT MARRYING AGAIN - OR SHOULD I?
According to the Australian Bureau of Statistics, in 2001 there were 103,130 marriages and 55,330 divorces. For married couples, the disturbing reality is that more than = as many people are getting divorced as are taking the plunge into marriage.
Even without the statistics, it has been much publicised in recent times and the number of marriages is declining and the number of divorces increasing. Of course, there is no longer a stigma attached to divorce and society is certainly more accepting of defacto relationships. In a 2001 survey by the ABS, 72% of couples stated that they had lived together prior to marriage. This is a vast increase to the 31% who admitted to cohabitation prior to marriage in 1981.
So what about remarriage? In 1997, 33% of the marriages recorded by the ABS were the remarriage of either one or both of the parties. Unfortunately for those couples, the ABS also records that couples who have been divorced previously have a slightly higher chance of divorcing than couples in their first marriages.
These statistics do not offer much incentive to any person considering remarriage. We have attempted to address some of the topical issues surrounding the second marriage and living together.
JUST LIVING TOGETHER
When married couples separate and divorce, division of their assets is dealt with by the Family Law Act. Until 21 December 1999, defacto couples who separated could only have a dispute concerning division of their property dealt with by the common law. This was an expensive, lengthy and technical process. On 21 December 1999, amendments to the Property Law Act were assented to, enshrining in statute the rights of defacto couples.
Practically, the relevant provisions of the Family Law Act and the provisions of the Property Law Act are almost identical. Provided that the defacto couple has lived in the defacto relationship for two years or the relationship satisfies one of the other criteria in the Act, then the parties have very similar rights to property settlement as those of married couples. We have heard stories along the grapevine of men who have not married their defacto wives because they think that when they separate, the defacto wife will be entitled to nothing. That is not true, particularly in relationships of years duration, which have produced children and where the defacto wife has fulfilled a role identical to that of a married woman. Even in circumstances where the defacto wife has turned down opportunities to work at the request of the husband so that she can be available for him, the defacto wife will receive credit and some adjustment in a property settlement.
There is however, one very important difference between married couples and defacto couples. Married spouses can apply to the Court for payment of spousal maintenance, known as alimony by avid television watchers. There is no such provision for spousal maintenance for defacto couples. In circumstances where one party is a high income earner and the other has always fulfilled the homemaker role, the lack of provision for spousal maintenance could potentially save that income earner years of payment to the other party.
If you and your partner are not contemplating marriage, but instead have agreed to continue your de facto relationship, then you may be interested in entering into what is called a Cohabitation Agreement. A Cohabitation Agreement is similar to that of a Prenuptial Agreement, in that it is a private Agreement entered into between you and your partner which outlines the way which you have both agreed to divide your property upon dissolution of the relationship. The main differences between a prenuptial Agreement and a Cohabitation Agreement are that it is entered into between parties who are not contemplating marriage, and it is governed by the Property Law Act rather than the Family Law Act. Therefore, in the event that the Cohabitation Agreement needs to be enforced, an application would need to be made to the Supreme Court, not the Family Court.
THINKING ABOUT GETTING MARRIED?
What happens if you and your partner are already engaged, or at least contemplating entering into marriage? In that case, you can still enter into a written agreement so as to protect your respective pre-marriage assets. This such agreement is called a Financial Agreement and is governed by the Family Law Act. You might be more familiar with the term Prenuptial Agreement. For some time there seemed to be a common perception among the community that Financial Agreements (or prenuptial agreements) were not worth the paper they were written on, and that the Courts were not interested in enforcing them. Arguably, before Financial Agreements were governed by the Family Law Act, there was some substance behind this perception. However, since 2000 when the Family Law Act was amended to include Financial Agreements, Financial Agreements are now completely enforceable in the Family Court. The old perception is clearly a myth.
Essentially, a Financial Agreement entered into before marriage is a written agreement between parties who are anticipating marriage which sets out how, in the event of the breakdown of the marriage, all or any of the property or financial resources of either or both party at the time when the agreement is made, or at a later time before the dissolution of the marriage, is to be dealt with. And because it is an literally an agreement, the parties are at liberty to incorporate all and any terms that they may desire. Notwithstanding this, it is common to find Financial Agreements which provide that property owned individually and in existence at the date of the agreement be wholly retained by their respective owners upon dissolution, and that all property jointly acquired during the marriage but before dissolution be divided equally, or at least in accordance with each partys contribution to the acquisition of that property. Alternatively, parties may use a Financial Agreement to deal only with the property in existence at the time of the agreement, and in relation to property acquired jointly throughout the marriage, cross that bridge when they come to it. Certainly, each case is different and for that reason there are necessarily infinite variations of Financial Agreements.
A couple of things to bear in mind though...Firstly, only one binding Financial Agreement can be in existence at any one time between the parties. Secondly, in order for a Financial Agreement to be legally binding, it must be signed off by a legal practitioner. This safeguard ensures that parties may only enter into a Financial Agreement once they have received independent legal advice regarding the effects of the proposed Agreement on their rights, and as to the advantages and disadvantages to them of the Agreement, at the time the advice was provided. This safeguard is extremely important given that a Financial Agreement ousts the jurisdiction of the Court. It also aims to prevent one party dominating the other. Thirdly, and probably for obvious reasons, it is not prudent to enter into a Financial Agreement on the eve of the wedding. One of the reasons is that one, or both, of the parties may feel undue pressure and upon the dissolution of marriage, the question of duress may be raised. In any event, Financial Agreements are a legally binding agreement and as with any legally binding agreement, should be approached with prudence and a clear mind.
ALREADY MARRIED?
So you have already walked down the aisle for the first, second or third time...and the marriage is still subsisting. You may have been married for 3 months or 30 years. You may, or may not be contemplating separation. Whatever your particular circumstances are, once you are married you can protect your individual assets through a Financial Agreement entered into during the marriage. Essentially, a Financial Agreement entered during marriage is the same as a Financial Agreement entered into before marriage in that it is a private agreement dealing with the division of property upon dissolution of the relationship, entered into between two parties, only in this instance the parties are already married. Again, a legal practitioner is required to sign off on the Agreement, and only one such Agreement can exist at any one time.
In light of the statistics, it is apparent that if you are considering entering into a marriage, whether it be your 1st, 2nd or even 3rd or just moving in with someone, your very best insurance is a legally binding Agreement. Armed with this advice, now for the hard part, Honey, I love you but I need you to sign this.
Kate Graham