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It Just A Simple Agreement: Financial Agreement

“I just want a Financial Agreement, it’s just a simple one to say that we will each keep our own assets”.

If I (and most family lawyers gold coast I am sure) had $1 for every time they had a client say this to them, we all would be retired!

To put it simply, there are no “simple” Financial Agreements and particularly no simple Financial Agreements that are being entered into at the commencement of a relationship.

To illustrate just how and why these agreements need to be carefully considered, properly drafted and advised upon, below are just some of the many questions (and questions within questions) and queries that I have when discussing Financial Agreements with a client:

  1. Will your assets be kept strictly separate? Will you keep your financial contributions towards these assets strictly separate? Do you now or do you intend to acquire any assets together (this can be any form of asset, from a property to a car, caravan, shares or investments)? If so, what will be the financial arrangements for the acquisition and ownership of this asset?
  2. If there are co-owned assets, how will these be divided if you separate? How gets to keep them? If there is an argument about who gets to keep them, how will this argument be resolved?
  3. Will the agreement cover all assets in their entirety? Or is the intention of the agreement just to “quarantine” certain assets from a claim upon separation? If only certain assets are dealt with then the specific assets not covered will need to be dealt with in accordance with usual family law principles and as such you may end up in negotiations regarding these matters. If you want to specifically avoid all forms of family law application, then the agreement must cover ALL assets.
  4. If there is to be a payment made at payment is to be made from one partner to the other upon separation then how is that calculated? Is it by reference to years of the relationship or number of children? Is there a sliding scale to a maximum amount? Is it based on dollars or percentages? Does the dollar amount increase over time? Is that increase based on CPI or another figure? When is the payment due, is it in one lump sum or over time? What are the consequences of non-payment?
  5. Do you plan to have children? If so, what do you intend to do with the terms of the agreement at that time? Does it terminate or do you put in place different payment arrangements? How will you re-consider the terms of the agreement at that time to consider what is fair and reasonable?
  6. If there is a significant difference between one partner’s income and financial position, will there be provision for support for the lesser financial spouse if the parties separate? If so, how is that to be calculated? How long is it to go on for? Will it decrease over time?
  7. What about your pets? How will they be considered in the agreement? Who will have possession of them at separation? Will you have shared possession? How will their food and veterinary expenses be dealt with?
  8. Do you wish to trigger a review of the agreement? If so when? Is it by reference to years, or events (such as children being born or houses being purchased)?
  9. Do you anticipate receiving an inheritance in the near future? Is this to be quarantined? What will you do if the funds are intermingled with joint assets?

So if you are considering a Financial Agreement at the commencement of your relationship, please consider it as a detailed and complex document that needs careful consideration and most importantly, expert legal drafting.

Taking the time to get proper legal advice about these types of agreement is of utmost importance. Utilising a specialist Family Lawyer is the best way to ensure that your agreement is drafted as you want it to be and is carefully considered and deals with as many of the “ifs, buts and maybes” that could arise.

The specialist family law team at OMB Solicitors can guide you through this process to ensure that your needs are met and your agreement drafted promptly and properly.

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