As you may be aware, Family Law legislation was amended in December 2000 to allow parties to a marriage or anticipated marriage to enter into binding financial agreements. These agreements determine how property will be distributed between the parties in the event of a marriage break up.
The legislation is most particular on the formalities and content of these agreements but if they are prepared in strict compliance with the legislation, they provide peace of mind – knowing that potentially acrimonious, expensive and time consuming fights over property will be avoided.
Although initial enquiries about these agreements were fewer than we had expected, we are now finding an upsurge in their popularity. They have become standard for many people embarking on a second marriage – especially those who have experienced property settlement litigation in the Family Court.
Where parents have significant estates, there is a growing expectation that children will agree to enter into these agreements to ensure that assets they inherit from their parents will not be the subject of a claim by their spouse.
Property rights also arise out of de facto relationships of at least 2 years duration, including same sex relationships. Here also, it has been possible to enter into a binding agreement (known as a ‘recognised agreement’) with the same benefits as a binding financial agreement under the Family Law legislation.
Again, these ‘recognised agreements’ are becoming popular as more de facto couples are litigating over property matters after the break up of their relationships.
These documents can be an important part of your estate planning and very cost effective for the peace of mind and protection they may provide.