Hi there. People in a marriage or de facto relationship can protect their assets by entering a ‘financial agreement’. You may know these documents as pre-nuptial agreements, but the legal term is ‘financial agreement’.

A financial agreement is a legally binding document that specifies the ownership rights of each party to the marriage or de facto relationship and what will happen to this property in the event that the relationship breaks down. These agreements can be made before, during or after the marriage or de facto relationship.

For a financial agreement to be legally valid, it must comply with certain requirements under the Family Law Act 1975 (Cth). The agreement must be signed by all parties and, before signing, each party must have obtained independent legal advice about the effect of the agreement. A lawyer must certify that they have provided this advice. Although a financial agreement is binding on the parties, if it does not comply with the legal requirements under the relevant legislation, a court may declare the agreement invalid and set it aside. A family lawyer will be able to prepare a financial agreement for you and advise you of its effect.

To ensure your property passes to your children in the event of your death, you need to have a valid will. This is a written document that sets out what will happen to your property (known as your ‘estate’) when you die. You can specify who is to receive your property.

If you were to die with only a will, and not a financial agreement, it is possible that your current de facto partner may be eligible to make a claim to part of your estate. This could trigger an unintended dispute over the distribution of your estate.

Suggested way forward

You should consider speaking to a lawyer about whether a financial agreement is right for you. You should also consider reviewing your will to ensure it is compatible with any financial agreement you may decide to sign, and otherwise reflects how you want to distribute your estate after your death. By pressing the “Consult a Lawyer” button, LawAdvisor can help you search for experienced lawyers and obtain fee proposals for their services. Costs for legal advice and representation will vary between providers based on experience and the scope of services.