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      What is a Prenuptial Agreement and When Should You Get One? 1024 683 Dorter

      What is a Prenuptial Agreement and When Should You Get One?

      A prenuptial agreement is a valuable resource for couples contemplating marriage or a de facto relationship. In the modern landscape of relationships, it’s essential to have a clear understanding of how financial matters will be handled in the event of a separation or divorce.

      Prenuptial agreements, also known as Binding Financial Agreements (BFAs), offer a legal framework that can bring certainty, protection, and peace of mind to couples entering into a life together.

      Prenups may seem unromantic at first glance, but they serve as a strategic tool to safeguard your financial interests, preserve your assets, and outline the division of property and liabilities should the unfortunate need for separation arise.

      By establishing a prenup, you take control of your financial future, ensuring that your wishes are respected during both the highs and lows of your relationship.

      In this article, we will discuss all things prenuptial agreements, including what can be covered by one, when they are a good option and how to know when you need one.

      There are various reasons why a couple may want to enter into a prenuptial agreement. Whether you’re a couple with substantial assets, own a family business, have children from previous relationships, or simply want to clarify your financial expectations, a prenuptial agreement may provide the desired outcome.

      What is a prenuptial agreement?

      A prenuptial agreement, within the Australian family law framework, is referred to as a Binding Financial Agreement (BFA). This legal document is crafted between couples before their marriage or before they commence living together as a de facto couple.

      The primary objective of this agreement is to establish a clear roadmap for the division of assets and property in the unfortunate event of a separation or divorce. By setting out these provisions in advance, the parties involved can safeguard their financial interests and retain the ability to make decisions about their future without resorting to court intervention.

      This legally binding agreement encompasses a comprehensive understanding of each individual’s assets, property, and potential liabilities. It outlines the rights and entitlements of each party concerning these aspects following the marriage. Essentially, the BFA is a written contract that not only delineates the financial standing of both individuals but also delineates how financial matters will be handled should the relationship come to an end.

      It’s important to note that the term “prenuptial agreement” is commonly used interchangeably with “Binding Financial Agreement.” However, in the Australian legal context, the latter is the accurate and legally recognised terminology.

      Who is eligible to enter into a prenuptial agreement within the Australian family law system?

      To participate in a prenuptial agreement under the Australian family law framework, individuals must be legal adults, (18 years of age).

      This arrangement is open to couples intending to marry or embark on a de facto relationship, including both heterosexual and same-sex couples alike.

      What does a prenuptial agreement encompass within the context of Australian family law?

      A prenuptial agreement can encompass a diverse array of subject matters under the purview of Australian family law and extends to assets acquired prior to the relationship’s commencement, as well as those procured during its course.

      Among the assets that may be included in a prenuptial agreement are:

      • Money: Financial holdings and currency.
      • Real Estate and Property: Ownership interests in land and properties.
      • Businesses: Stake in business ventures or enterprises.
      • Inheritances: Assets bequeathed from family members or other sources.
      • Investments: Monetary ventures designed for potential growth or profit.
      • Superannuation: Retirement funds and pensions.

      Beyond the realm of property and assets, a prenuptial agreement may address other vital considerations such as provisions for spousal maintenance, delineating responsibilities for the settlement of debts and liabilities, as well as outlining the entitlements of both present and future children.

      Is a prenuptial agreement enforceable in Australia?

      Yes, prenuptial agreements are generally legally binding under Australian law, as long as they meet the requirements specified in the Family Law Act 1975.

      One essential requirement is that both parties must have received independent legal advice. This advice serves to inform the parties about the effect of the agreement on their rights, the advantages and disadvantages of entering into it, and the overall fairness and equitability of its provisions.

      However, there are instances where courts can set aside a prenuptial agreement if it is found not to comply with the legal prerequisites or if specific conditions are met. To learn more about when a prenuptial agreement or binding financial agreement can be set aside, read this.

      What are the pros and cons of prenups?

      Prenuptial agreements have their advantages and drawbacks, including but not necessarily limited to:

      Pros of Prenuptial Agreements:

      Transparency and Clarity

      Prenups provide transparency by outlining each party’s assets and their distribution. This clarity may reduce confusion and potential disputes later on.

      Wealth Protection

      Prenups can safeguard individual wealth brought into the marriage and assets acquired during the marriage. They may help designate separate and shared property, protecting financial interests.

      Security and Planning

      Prenups can prepare couples for potential divorce risks, ensuring financial security for both parties regardless of the marriage’s outcome.

      Prevent Disputes

      By establishing asset division and financial expectations upfront, prenups can prevent future disputes and arguments over property distribution.

      Protection for Children

      Prenups can protect assets for children from previous marriages and establish provisions for inheritance, ensuring their financial well-being.

      Business Protection

      Prenups can safeguard business interests and succession planning, ensuring business assets remain unaffected in the event of a divorce.

      Cons of Prenuptial Agreements:

      Lack of Romance

      Prenups introduce practical discussions about asset division and divorce before marriage, potentially dampening the romantic atmosphere associated with weddings.

      Uncertainty

      Prenups are not always foolproof. If assets are hidden or not disclosed fully, the agreement may not hold up in court. This uncertainty can lead to legal challenges.

      Not Always Enforceable

      A poorly drafted prenup may not be enforceable in court, potentially rendering its terms ineffective and providing no protection.

      Potential for Conflict

      Discussing and negotiating a prenup could strain the relationship, leading to disagreements or conflicts between partners.

      Questioning Commitment

      The presence of a prenup might raise doubts for a couple about the long-term commitment and confidence in the relationship’s success.

      Legal assistance for prenuptial agreements in Australia

      If you require guidance or assistance with a prenuptial agreement in Australia, or concerned with its validity, you can discuss your situation with our family lawyers here at Dorter Family Lawyers and Mediators. We are experienced in a wide variety of family law and financial matters, including advising on prenuptial agreements in Australia.

      Discuss your situation with us today in a no obligation consultation. Get in touch with us by calling us on 02 5566 2998 or booking online here.

        What if my ex-partner won’t comply with Court Orders? 1024 745 Dorter

        What if my ex-partner won’t comply with Court Orders?

        So, the Court has made Orders, or you’ve got a binding agreement. You’ve spent a lot of money on litigation or having a lawyer negotiate and prepare a formal agreement setting out your respective legal rights and obligations. You want to move on with your life, but your ex won’t let you.

        Unfortunately, this scenario is somewhat common in Australia. However, while it is common, it’s not impossible to overcome. In this article, we’re going to help you understand Court Orders, including what may happen when you or the other party don’t comply with them and how you can enforce them.

        The family law system in Australia is complex and often overwhelming for those involved in a legal matter, so before we dive into how you can have Court Orders enforced, let’s talk about Court Orders generally.

        Table of Contents:

        What is a Court Order?

        A court order is a decision that helps to resolve a legal matter and is made by a judge or judicial officer.

        Essentially, a Court Order is a set of rules or decision that is legally binding and provides clarity of the legal relationship (obligations and rights) between the people (parties) involved in the legal matter.

        Court Orders can be made in a few different ways. A Court Order may be made after two parties have made a private agreement regarding a matter, such as how they plan to parent after a separation, and they wish to make it legally binding – this is known as a consent order. Court Orders are also often made after a hearing or trial.

        When Court Orders are made for family law matters in Australia, they are usually about parenting or financial issues.

        Are there different types of Court Orders?

        There are a few different types of Court Orders, including:

        Final Orders

        These orders are the orders that resolve a legal matter and bring it to an end.

        Interlocutory Orders

        An interlocutory or interim order is commonly made in situations where the matter is urgent or a decision is needed before a final trial. This type of order is temporary and usually put in place until final orders can be made.

        Consent Orders

        For many family law matters you have the option to resolve the matter privately, outside of the courts. However, if you don’t formalise the agreement and make it legally binding, the parties are relying on each other to uphold their end of the agreement. A consent order is an order that makes a private agreement between parties legally binding.

        What kinds of matters can court orders be made for?

        As we touched on above, in a family law context, Court Orders are usually made for parenting concerns or financial matters.

        Parenting Orders

        These kinds of orders are made about parenting matters such as communication and/or spending time between parents and their children, where the child/ren may live, and other welfare related arrangements for children.

        Parenting orders can be applied for by any person who is concerned with the care, welfare, and development of a child, which may include the child’s parents, grandparents and relatives.

        When the Court is making a decision regarding a parenting order, the best interests of the child are the paramount consideration. The Court needs to consider two key factors – the benefit to the child of having a meaningful relationship and bond with both parents and the need to protect the child from harm (including psychological and physical harm).

        Parenting orders can be applied for at any time, including before, after or during a separation or divorce.

        Financial Orders

        Financial orders are usually made to resolve matters such as the division of property and assets or providing financial support after the breakdown of a relationship (spousal maintenance).

        As part of making the Orders, the Court will need to ensure that the arrangements set out are “just and equitable” for each party, and often they will require detailed information from each party to ensure that this is the case.

        There are time limits which apply to persons seeking to apply for financial orders. For couples who were married, they have 12 months after a divorce order has been granted to apply for financial orders. For de facto relationships, financial order applications need to be made within two years of the relationship ending.

        What happens when you don’t comply with a Court Order?

        Non-compliance with a Court Order, also referred to as breaching a Court Order, means that a party has not followed the rules or regulations that have been provided as part of their Court Order.

        However, while it may be frustrating that a person isn’t following a legally binding order, they are not going to be immediately arrested for this. Rather, for there to be any consequences for the non-compliance of the Order, the other party involved will need to file a Contravention Application or an enforcement application.

        Contraventions

        This application essentially alerts the Courts to the non-compliance of the Order and can result in the person who has not been compliant facing serious consequences. They could face penalties such as having to participate in counselling, performing community service, paying a fine, paying compensation to the other party, or in particularly serious circumstances, they could face imprisonment.

        Before filing a Contravention Application an attempt to resolve the matter through a means such as Family Dispute Resolution must occur, in most circumstances. If you have attempted to obtain Family Dispute Resolution or have been ruled as exempt from this requirement, you can then apply for the Contravention Application.

        To make your Contravention Application you will need to submit an affidavit providing information of how the accused party has contravened the Orders, and either the Family Dispute Resolution Certificate or proof of your exemption.

        It’s important to be aware that a breach of Court Orders can happen in a variety of different ways. It must also be considered whether the breaching party had what is known as a “reasonable excuse” for not complying with the order.

        Reasonable excuses that may be accepted by the Court include:

        • The party that breached the Order believed that their actions were required to protect the health and safety of a person or child; or
        • The actions of the party causing the breach did not continue longer than was necessary to protect the health and safety of the person. 

        If someone has breached an Order, what should you do?

        If you find yourself in a situation where the other party to your agreement, your ex for example, is not complying with an Order, it’s important to take a step back and consider the circumstances of the situation. Below, we’ve included some things to think about if a breach of an Order occurs:

        Non-compliance with Parenting Orders

        Has the other parent breached or contravened your parenting Orders? A party may file a Contravention Application if another party has breached Court Orders. Before taking any action, the aggrieved party must consider two questions;

        1. Did the other parent have a reasonable excuse? and
        2. What do I want to achieve by going to Court?

        If the answer to question 1 is yes, then you should reconsider before hastily filing an application in Court. 

        So, what do you wish to achieve?  If the answer to that question is that you hope to seek to change the Orders, you may wish to consider making an interim application or a new final orders application. If the breached Orders are final, there will need to have been a significant change in circumstances. The change in circumstances could be the breach of the Orders, but it depends on the circumstances of the breach.

        Non-compliance with Financial Orders

        Unfortunately, from time-to-time parties are unable to fulfil their obligations for various reasons. There are times where a party may also try to evade their obligations. Below are some examples of common breaches that occur with property orders:

        1. Has your ex-partner refused to sign a document? – The Court can order a Registrar to sign a document on their behalf.
        2. Has your ex-partner refused to make a payment? – You could Consider making an application for Third Party Debt Notice. A Third Party Debt Notice is the Family Court version of a garnishee order. It allows the Court to order that a payment be made from a party’s source of income/capital e.g. salary or savings.
        3. Has your ex-partner refused to make a payment and have no cash or income? – You can consider making an application for the sale of their property so that you may receive your entitlement.

        Interest may be payable under the Court Rules if the Court makes an order for payment and the payment is made late.

        Plan for the worst

        It may be cynical, but as the saying goes, it is always better to be safe than sorry. When you are negotiating your agreement, consider what will happen if a payment is not made or your ex-partner skips the country. In most circumstances, there might be an appropriate alternate outcome if a party defaults or form of security that can be offered if that a party fails to comply. 

        It’s also important to consider seeking legal advice from an experienced family lawyer. A family lawyer can help you understand your options and obligations so that you can make informed decisions for your future.

        If you would like any assistance with compliance of Orders or Agreements, Dorter Family Lawyers and Mediators are expert family lawyers who specialise in all areas of family law and can assist. Please contact with us on (02) 9929 8840.

        pets-property-settlement
          Your Pet as Property: The Property Pet Predicament 1024 683 Dorter

          Your Pet as Property: The Property Pet Predicament

          Pets as Property

          With the increase of pet adoption and purchases during times of COVID-19, you may want to know how the Family Court would currently treat our furry friends in a family law dispute, should it eventuate.

          While most pet-lovers easily consider their pets and other furry-friends honorary family members and life-time companions, figuring out who keeps the fur baby can often be distressing as pet “custody” disputes remain unclear in the realm of Family Law.

          We understand that separating pets from children and their owners can be stressful and difficult, adding another layer of tension during an already difficult time and, as a result, it is important to know how the Court deals with pet custody disputes.

          Pets are Property

          There is currently little to no legislation to assist with navigating pet custody. As a result, the Courts often approach pets in conjunction with personal property or other assets under s 79(1) of the Family Law Act, applying principles that would be applied to other personal assets including furniture or clothing.

          The Court has a duty to finalise all financial relationships between the parties and to ensure that their financial ties are severed with finality. As pets are considered property, this means the Court in the Family Court jurisdiction is unlikely to grant orders for shared ‘pet custody’ so to speak.

          Similar to treating any other asset of a property dispute, the Court will consider a number of factors to determine who will be able to retain their pet companion, including:

          1. Who the pet resided with prior to, during and following separation;
          2. The relationship each of the parties have with the pet;
          3. Who has been responsible for the financial expenses associated with owning the pet;
          4. Who has the most suitable place for the pet to live; and
          5. Who the pet is registered to.

          Every matter differs on a case by case basis and the weight on each factor will also depend on the circumstances of the case.

          This is often unsatisfactory and fails to recognise the emotional relationship built with your companion. As a result, alternative options may be required to determine the care arrangements for your companion. There are a number of different options that may assist you when dealing with separation when it comes to you beloved family pets.

          Negotiation

          As with any other parent, it is always best to resolve any differences by negotiating the living arrangements between the parents.  We understand that negotiation can be hard during difficult times, such as separation and as a result, we are here to help. This may be done by assisting you in articulating suitable arrangements through an exchanging of letters or face-to-face, during mediation, to determine what arrangements would be best suited for each party.

          It is important to note however that agreements reached by negotiation are not legally binding and can be subject to change. Although the benefit is flexibility, agreements are not enforceable under the Family Law Act unless they are considered Binding Financial Agreements, or are Orders of the Court.

          A “Pre-Nup” or in this case a “Pet-Nup”

          One alternative to formalise pet custody arrangements is in the form of a Binding Financial Agreements (BFA). A BFA is an enforceable contract and you can include clauses detailing pet care arrangements in the event of separation.  BFAs prior to marriage (otherwise known as pre-nuptial agreements) refer to agreements entered into between the parties which establish how financial affairs and property will be addressed in the event of a relationship breakdown. You can also enter into a BFA after separation.

          BFA’s do need to satisfy a number of legal requirements to be binding. However, it may be an effective way of amicably laying out custody arrangements of your beloved pet without requiring the intervention of the Court.

          Find more about Binding Financial Agreements here.

          Consent Orders

          Much like Negotiations, Consent Orders are made with the consent between the parties. Consent Orders refers to a written agreement that is approved by the Court and may encompass a range of issues including management of your fur-baby.

          The advantage of these Orders are that they usually legally binding and therefore enforceable upon both parties, ensuring that any agreement that is reached will continue in accordance with the Orders of the Court. However, in the context of pet custody, there is much debate whether Orders made for ‘spend time’ arrangements or ‘shared’ care for your pets are enforceable Orders. This is because pets are considered ‘property’ and the Court has a duty to finalise and determine all financial relationships between the parties.

          However, there has been circumstances where the Court was prepared to make Orders for shared ‘custody’ of the pets ordering the pet to remain with children and to travel between residences on the same schedule as the children.

          Do you need help with your family law dispute?

          Dorter Family Lawyers and Mediators offer specialist family law advice in McMahons Point on Sydney’s Lower North Shore, and are available to assist you with any questions you may have about your pet predicament.  Please get in touch with us on (02) 9929 8840 or enquiring here.

          Julie Cheung

          Associate

          Rebekah Dorter

          Principal

          This post is an overview only and should not be considered as legal advice.  If there are any matters that you would like us to advise you on, then please contact us.

          sydney-spousal-maintenance
            Binding Financial Agreements and How to Set them Aside 1024 684 Dorter

            Binding Financial Agreements and How to Set them Aside

            Have you entered into a Binding Financial Agreement (BFA) that is outdated or is unfair?

            In certain circumstances, the laws in Australia may enable a party to receive a just and equitable property settlement, if permitted by the Court.

            Recent Decision

            In October 2019, in the decision of Westacott & Dunwoody (No. 2) [2019] FAMCA 719, Dorter Family Lawyers and Mediators successfully set aside a BFA on the grounds that it would have been unjust and inequitable to not uphold the Termination Agreement the parties had entered into on separation. Dorter Family Lawyers represented the Husband who is now able to seek a property division that will be just and equitable under the Family Law.

            The Husband sought to set aside a BFA entered into by both the Husband and the Wife in 2005. In 2018, the parties entered into a Termination Agreement which enabled the parties to enter into Consent Orders for a final property settlement with terms different to their original BFA.

            The Wife later sought for the Termination Agreement to be set aside, and to uphold the BFA on the grounds that the Husband did not obtain the required independent legal advice when entering into the Termination Agreement.

            The Court found that since the making of the BFA, the Wife had made various payments to the Husband which were consistent with the Termination Agreement and inconsistent with the BFA. Accordingly, the Court found that it would be unjust and inequitable for the Termination Agreement to not be upheld and therefore, declared the Termination Agreement binding, which effectively terminated the BFA.

            What is a BFA?

            A BFA, or commonly known as a ‘Prenup,’ is an agreement entered into by two parties to a relationship which sets out how, in the event of a relationship breakdown, the parties’ financial affairs and property will be dealt with. You can enter into a BFA prior to being married or engaged, during a de facto relationship or marriage, or after a divorce.

            Provided that all the legal requirements are satisfied when entering into the BFA, you and your partner will be bound by the terms of the agreement. As a result, you do not need to approach the Court for a final determination of your property settlement in the event your relationship breaks down.

            Is your BFA Binding?

            Before you consider setting aside your BFA, the Court will consider whether your BFA is binding.

            Under the Family Law Act 1975 (Cth) (“the Act”), a financial agreement is only binding if you and your partner each satisfy the following:

            1. The agreement is signed by each party;
            2. Before signing the agreement, independent legal advice is obtained by each party in relation to the effect of the agreement and the advantages and disadvantages of the agreement;
            3. Each party obtains a statement signed by their legal practitioner stating that this advice was provided; and
            4. Neither party has terminated the agreement and the agreement has not been set aside by the Court.

            If one or more of the above has not been satisfied, you may not be bound by your BFA. You may then be entitled to seek a property settlement that would be considered just and equitable under the Family Law.

            Terminating the BFA

            If both you and your partner no longer wish to be bound by your BFA, you may terminate the agreement by entering into a further BFA terminating the first agreement, or by entering into a ‘Termination Agreement’. These are the only two options available to terminate the agreement in accordance with the Act and you should obtain legal advice about how to do this.

            Before signing a Termination Agreement, each party must obtain independent legal advice to understand their rights and to understand the advantages and disadvantages of making the Termination Agreement.

            Setting aside the BFA

            If the parties have not terminated their BFA and a party wishes to set aside the BFA, the Court must be satisfied of one of the following grounds:

            1. The agreement was obtained by fraud;
            2. The purpose of the agreement was to defraud or defeat a creditor or the other party;
            3. The agreement was made with reckless disregard to creditors or the other party;
            4. The purpose of the agreement was to defeat an interest of the other party;
            5. The agreement is void, voidable or unenforceable;
            6. Circumstances have arisen to make the agreement impracticable to be carried out;
            7. Since the making of the agreement, there has been material changes which involve the care, welfare and development of a child and the party who is responsible for the child will suffer hardship if the BFA is not set aside; or
            8. A party engaged in unconscionable conduct when making the agreement.

            Application of Rules of Contract

            A BFA, being a contract, is subject to the laws of contract and legal advice should be obtained to ensure your BFA also complies with the laws of contracts.

            Simplifying the laws of contract, the BFA may be voidable or unenforceable if:

            1. One party repudiates the contract by showing that they no longer wish to be bound by the contract and the other party chooses to rescind the contract; or
            2. One party intentionally waives their right to enforce the contract or abandons the contract by acting in a way that is totally inconsistent with the contract.

            FAQs

            1. Do I have to go to Court to set the BFA aside?

            Unfortunately, to set a BFA aside, you will need an order of the Court if the other party does not agree to mediate and reach agreement. If both parties agree to not be bound by a BFA, a Termination Agreement should be completed in accordance with the Family Law Act.

            2. What if the BFA does not deal with all of the property in the event of separation or divorce?

            Part or all of the BFA may become uncertain and therefore unenforceable. This will depend on the terms of the clause considered in the context of the BFA entirely.

            3. Can the BFA include a parenting agreement?

            These clauses will not be binding and cannot be enforced. The best way to deal with parenting is through Consent Parenting Orders.

            4. Can the BFA include a spousal maintenance? 

            The Court will still have jurisdiction to deal with spouse maintenance in accordance with the Family Law.

            Do You Need Legal Support for Binding Agreements?

            Each party’s circumstances are unique and legal advice should be obtained from a family lawyer who specialises in such agreements if you seek to rely upon or set aside a BFA.

            If you require assistance, please contact Dorter Family Lawyers and Mediators on (02) 9929 8840 or via email.