Take plans to safeguard your financial future

Date: Aug 06, 2012

Nobody likes to think about what might happen if a relationship ends - but with a number of high-profile splits hitting the headlines in Hollywood in recent weeks, it is an important reminder for couples to think carefully about their finances before making a joint commitment.

From Tom Cruise and Katie Holmes - who swiftly resolved a custody conflict over daughter Suri - to Twilight stars Robert Pattinson and Kristen Stewart, we have seen that relationships can end at any time.

With this in mind, it is important that couples - whether they are de facto partners cohabiting for the first time or planning their wedding - enter serious relationships with one eye on their finances, especially if one partner brings significantly more assets or debts to the partnership than the other.

One solution that may bring both parties the peace of mind they need is a binding financial agreement, which can be agreed at any time during a relationship. When this type of arrangement is entered into before marriage, it is more commonly referred to as a prenuptial agreement.

Simply put, financial agreements set out in clear terms how a couple's assets will be divided in the event the relationship breaks down - and many couples find that these arrangements provide them with additional peace of mind, especially if they are entering into a subsequent marriage or relationship.

However, it is very important to remember that financial agreements are more complicated than filling in a simple form. Each party will need to obtain independent legal advice, and both members of the couple will need to make a full and frank disclosure about their financial circumstances.

These measures allow agreements to be drafted up fairly - and being upfront and honest from the very beginning will make the agreement less likely to be challenged in the future.

Entering into a financial agreement involves both parties' compliance with a number of technical requirements. This is where the experience of a trusted family lawyer is invaluable - their skill and experience can provide valuable guidance and your lawyer help you through every step of the process.

Your lawyer can also advise on how your assets would be divided without a financial agreement in place and help you determine whether this is an appropriate course of action in your unique circumstances.