Couples need to make sure their financial agreements are approached correctly from day one to avoid being set aside by the court later, according to Queensland‟s largest law firm practising exclusively in family law.
Dan Bottrell, partner at Jones Mitchell Lawyers, said the recent spate of high profile agreements (colloquially known as pre-nups) being challenged in the courts were prompting questions within the legal fraternity as to whether the law will change.
Financial agreements under the Family Law Act are still available as the only option for couples seeking to have their own contract to determine what will happen with their property and finances, if they later separate.
“Given the uncertainty, financial agreements must be approached very carefully,” said Mr Bottrell.
“While lawyers will not be able to guarantee that they will be binding, they are still the only option for spouses seeking to record an agreement about how their property and assets will be divided if they ever separate.”
Mr Bottrell said there were guidelines couples could follow to ensure their financial agreement was as watertight as possible.
“It‟s important for couples to raise the issue of a financial agreement between themselves well before getting a lawyer involved,” he said.
“To avoid the agreement being the ‘death of love’, couples should consider counselling to avoid a conflict situation.
“If there is a stalemate, each partner should pause to consider the agreement from their partner’s perspective and recognise that for an agreement to be attractive it should be ‘fair’ to both parties now and in the future.”
Mr Bottrell’s comments come after the latest challenge to the full bench of the Family Court where a Sydney man is challenging his financial agreement on the grounds that the law governing such contracts is faulty.
In December, Olympian Grant Hackett announced he was suing his former legal team over his financial agreement with wife, Candice Alley.
Since December 2000, when the Family Law Act was amended, it has been possible to make financial arrangements either before marriage, during marriage, or after divorce.
Since March 2009, they have been available to de facto couples before starting a relationship, during a relationship, and after separation. They can cover property settlement, spousal maintenance (financial support) and any incidental financial issues.
Mr Bottrell said by law each partner was required to seek independent legal advice, so that each party understood the effect of the agreement, and the advantages and disadvantages of having it. This requirement can avoid situations where one party feels pressured by another to sign an unfair agreement.
He also recommended agreements be tailor-made for individual circumstances and that couples invest significant time, and possibly develop several versions, to ‘get it right’.
“It‟s also wise to consult experienced or specialist lawyers, who have particular experience in preparing and advising on financial agreements,” said Mr Bottrell.
“For many people, it’s worth investing funds at the beginning of a relationship rather than tens of thousands on legal fees in the Family Court at the end.”
Jones Mitchell has the following tips for making a financial agreement as durable as possible:
1. Consult experienced or specialist lawyers
Consult specialist family lawyers who have particular experience in preparing and advising on financial agreements. Make sure both of you have the resources available to take this advice.
2. Spend time preparing
Allow time for the agreement to be prepared and amended so that it achieves each of your objectives, and approach the task several months out from a proposed wedding date.
3. Consult other advisers
Give the agreement to your other advisers (accountant, financial planner etc) and ask for their input in making sure the outcome detailed is realistic.
4. Spend time considering
Meet with your lawyer to have the agreement explained to you in full. Ask your lawyer for their advice about the agreement in writing. Take time to carefully consider that advice. Raise any questions with your lawyer.
5. Consider counselling
If you feel under pressure from your spouse or partner to enter into the agreement, raise that with your lawyer, and they may be able to recommend a solution, such as counselling, so that your concerns can be heard.
6. Ensure all technical requirements are binding
Ask your lawyer if they have checked the technical requirements in your financial agreement before you sign off.
7. Keep a copy
Keep a copy of the signed agreement and a copy of the advice your lawyer gives you, in a safe place.
8. Update the agreement
Update the agreement with changes in circumstances, changes in wealth, significant relationship and ‘life’ events etc.
9. Make sure your will matches the financial agreement
Have wills which mirror the provisions of the agreement prepared by your estate planning lawyer at the same time as the agreement.
For more information:
Contact Merrett Pye, Altitude Public Relations, 0422 096 049 or Caroline Thurlow, Altitude Public Relations, 0414 565 575.
About Jones Mitchell Lawyers
Jones Mitchell Lawyers is Queensland‟s largest law firm practising exclusively in family and relationship law. The firm was established in 1990 and was then the first and only law firm in Queensland practising solely in matrimonial and family law, including de facto relationships. Uniquely, it remains the largest firm in Queensland to practise exclusively in family law and one, of only a few specialty family law firms, in Australia.