When any couple decides to merge their finances or assets - whether through cohabitation or marriage - it is wise to make proper financial preparation. Nobody likes to think about what would happen in the event a relationship breaks down, but a binding financial agreement - which is sometimes referred to as a prenuptial agreement - can help give both partners peace of mind.
A binding financial agreement is a legal document which sets out the financial arrangements should the marriage or de-facto relationship fail. Typically it can also provide for what happens to the property the parties entered into the relationship with, and what happens to assets acquired during the relationship. It can also refer to maintenance, or spousal support and the distribution of superannuation.
The first thing to remember about a binding financial agreement is that these documents are deal with financial matters, nothing more. Such an agreement cannot determine the outcome of a custody or parenting case and therefore children cannot be a part of such an agreement; this includes any child support issues or anything associated with custody arrangements.
A frank and honest discussion about money before entering into marriage can be a very healthy thing and as a result, such an agreement can be a relatively straightforward to negotiate.
A family lawyer can help go through all the legal requirements which can include independent lawyers to advise both parties, as well as the formalities for signing the agreement. Such a document is binding but of course, the hope is that it never becomes necessary to enforce it.
It also is important to consider an agreement where one of the parties has significantly more assets than the other. This can have wide-reaching consequences, as a messy divorce can result in a change in ownership of assets. Not only that-but a party which has longstanding family ties to a particular property runs the risk of losing it, should there be an absence of a binding financial agreement and the relationship breaks down.
A binding financial agreement simply allows for the two parties to decide what's important to them. The absence of one leaves a judge with the decision of how to divide the assets - a decision that may be against the wishes of one or both parties.