In recent years postnuptial agreements, known in Australia as a ‘Binding Financial Agreement’ have gained popularity and there are a number reasons a couple may wish to adopt a postnuptial agreement.
Why A Couple May Want A Postnuptial Agreement
- Predominately, there has been a change in a couple’s financial circumstances, such as an inheritance or large business transaction, which requires a change to the terms of an existing prenuptial agreement or the need to create a new financial plan in the event of death or divorce.
- One spouse is part of a family businesses and the family business wish to protect their ownership over the business. A postnuptial agreement can be used to exercise control over ownership of the business in the event of that spouses death or if the couple divorced.
- To establish a degree of financial certainty or to help resolve recurring arguments over finances, assets, children or other financial or family issues.
- For individuals entering into second or third marriage who have children from previous unions and what to make sure that their assets go to their respective children.
What Is A Postnuptial Agreement?
A postnuptial agreement is a Binding Financial Agreement that complies the Family Law Act 1975.
A postnuptial agreement is a contact that is drawn up after marriage or the form of a de facto relationship. The agreement provides details on how a couple’s assets and property would be split in the event of the couple divorcing, separating or upon death.
Related Article: Prenups For Lovers: Why Prenuptial Agreements Are Actually Romantic
What Is Included In A Postnuptial Agreement?
A typical postnuptial agreement would include:
- Assets and debts;
- Payment of any outstanding debts;
- Income and expectations of any gifts and / or inheritances;
- Any future income or gains including property;
- A list of personally and jointly owned belongings;
- What will be covered in each parties Will in the event of death;
- If and how much spouse maintenance will be paid;
- How any property will be split;
- Insurance coverage.
Is A Postnuptial Agreement Legally Binding?
If a postnuptial agreement (Binding Financial Agreement) correctly complies with the appropriate provisions of the Family Law Act 1975, the document will legally bind the signatories to the agreed procedure set out in the document.
Generally speaking a valid and legally binding agreement will contain the following elements:
- The agreement must be voluntary. Neither party should feel pressured into entering into the agreement;
- Both parties need to be separately and independently advised by a lawyer;
- Both parties must disclose their financial assets and liabilities in a full, frank and honest manner;
- There should be adequate time to reflect and consider the terms that are proposed in the postnuptial agreement, and neither party should feel pressured by time to sign the agreement;
- The agreement must be fair or it is unlikely to be upheld. The parties also should recognise that the matrimonial circumstances and the agreement are likely to change as time goes by.
There are provisions with the Act that address Binding Financial Agreements involving fraud, impracticality, unenforceability, changes in circumstances, unconscionable conduct and superannuation concerns. Under the Act, Binding Financial Agreements involving any of these considerations may be set aside by a court.
As time passes it is also advised for postnuptial agreements to be reviewed, especially if either party’s financial or personal circumstances change.
Note: This is general information advice only and does not constitute specific legal advice. If you would like further information in relation to this matter or other legal matters, please contact Resolve Conflict Family Lawyers in Melbourne on 03 9620 0088 or email email@example.com