“Pre-Nuptial Agreements”

When you’re starting out in a new relationship, it can sometimes be hard to consider what may happen if you were to separate from your loved one in future.  But the Australian Bureau of  Statistics tells us that if the present trends continue, it is likely that 32% of marriages will end in divorce. 

These are relationships that can be monitored and counted – marriage involves a process of registration, and divorce involves a process of court application.  This does not apply to de-facto relationships – there is no registration for de facto couples, and no dissolution process at separation.  It is estimated that the rate of separation for de facto couples is even greater than that for married couples. 

If you are entering into a relationship, and you have assets, you might wish to consider entering into a formal Agreement with your partner in relation to what happens to assets if you should happen to separate in future. 

This is a very sensitive issue, no doubt.  However, it is an important one for your financial future. 

By discussing this with your partner, you might find that your partner will agree to enter into such an Agreement.  After all, you partner may also have assets they wish to protect.

These types of agreements are similar to an “insurance policy” – it provides some clear guidance about how matters will be resolved between you in future if necessary. 

The types of issues that can be covered in a “Pre-Nup” Agreement are:

• what happens to assets you hold at the time you enter the relationship;
• what happens to assets you acquire together during the relationship; and
• how you will pay for accommodation expenses, particularly if you are living in a property owned by one party paying a mortgage in their sole name.

As with all “insurance policies”, there are important matters which must be disclosed up front.  Both parties must also be legally advised.   And, as you might expect, there are some exceptions to such agreements being binding – and that is why it is important for you to have a legal representative that knows about Family Law. 

If you are seeing a solicitor about entering into this type of agreement, you should take with you the following information:

• details of assets, debts and superannuation in your name;
• details of assets, debts and superannuation in your partner’s name;
• some understanding of what assets you want to protect;
• some understanding of what you and your partner intend to do in future in relation to acquiring further assets, or investing;
• some understanding of what you and your partner intend to do about living expenses and accommodation.

Property Settlement – Married Couples

If you haven’t entered into any binding agreement in relation to property settlement, then the relevant legislation to determine your property settlement in all states and territories except for Western Australia is the Commonwealth Family Law Act 1975. 

Despite popular belief, there are no set rules when it comes to property division in the Family Court. Each matter is unique - the way your case would be decided takes into account the current laws and previous decided cases which interpret those laws.

The first step in making a decision on property settlement involves identifying all the assets, debts, superannuation and any other financial resources.  Once those items are identified, they then need to be valued, or some agreement should be reached about their value.

The next step in working out what are your entitlements considers contributions to the property that you and your partner have made over the course of the relationship.  Contributions include:

• working and earning income;
• caring for the family including children;
• getting help from parents or other family members in caring for children or renovating the house.

The next step in making a decision on what are your entitlements considers your future needs.  Future needs factors will take into account your situation after property settlement such as:

• who will be caring for children;
• whether child support is payable and / or paid;
• if you have any capacity to work.

Lastly, the result is overviewed to make sure that it is just and equitable.

Your lawyer will help you identify the relevant issues to your situation and give you an idea on what is a reasonable settlement for you, and what a judge would likely decide if the matter proceeded to court.  Most importantly, your lawyer should give you a advice that is practical and realistic, with a view to helping you reach a resolution as quickly as possible. Some time limits do apply, so you should seek legal advice.

Before commencing any Court proceedings, it is essential to make a genuine attempt to resolve your property dispute without litigation.  There are numerous options to achieve this, including mediation, dispute resolution, and having your Family Lawyer assist in negotiations. 

If a Court is requested to make a decision, usually there is a mediation process first conducted by a Family Court Lawyer known as a Registrar.  This is done in an office, not in a Courtroom, and is an opportunity for the Registrar to understand the issues between you that are preventing you reach agreement.  Having an experienced Family Law solicitor attend with you can help resolve disagreement and view the situation from a more objective standpoint, and to advise you about your rights and responsibilities.  The Registrar is unable to give you legal advice if you are unrepresented.

If the Court has already granted a Divorce, please note that there is a 12 month time limit from the date of Divorce to make any application to a Court seeking property settlement orders.  If you are outside the 12 month time limit, you are required to ask the Court for leave (permission) to commence your application out of time.