We’ve all heard of pre nuptial agreements made before a couple wed. But what about a post nuptial agreement? Do they exist? Well, they do – and they are actually quite common in Australia, gaining popularity over the last few years. If you recently married or are perhaps considering entering a post nuptial agreement, here’s everything you need to know before making the final decision.
Binding Financial Agreement
We refer to a post nuptial agreement in Australia as a binding financial agreement under Section 90C of the Family Law Act 1975. This type of agreement includes pre nuptial agreements, post nuptial agreements, separation agreements and divorce agreements. What a binding financial agreement does is allow couples to enter a financial agreement during their marriage or de facto relationship to determine how property and spousal maintenance will be dealt with in the event of a divorce, separation or death.
Why Enter a Post Nuptial Agreement in Australia?
There are several reasons why couples enter this binding financial agreement throughout a marriage or relationship rather than before.
Circumstances can change throughout a marriage, particularly related to finance. If a couple already has a pre nuptial agreement, they may enter a post nuptial agreement simply for the sake of having up-to-date documentation.
If there has been a drastic change in a couple’s financial situation, then it is a good idea to enter a binding financial agreement. For instance, a spouse that inherits a large sum of money or a valuable heirloom during a marriage may change an existing pre nuptial agreement or create a brand new financial agreement in case of separation or death. This post nuptial agreement can help keep these assets set aside just for that spouse.
If one spouse is part of a family business and that business wishes to protect ownership and assets from the other spouse, a post nuptial agreement can be used to guarantee control over the ownership of the business in the event of the couple’s divorce or the spouse’s death.
For those entering a second or third marriage with children from previous relationships or marriages, a post nuptial agreement helps to ensure that their assets go to their children.
If you would like to know why you should enter a post nuptial agreement, feel free to chat to our team of family lawyers.
What Should a Post Nuptial Agreement Include?
A typical post nuptial agreement in Australia could include the following:
- Assets and debts;
- Joint and personally-owned belongings and assets;
- Spousal maintenance;
- Expectations of any gifts/inheritances;
- Insurance coverage;
- How any property will be split; and
- What is covered in each party’s Will in the event of death.
When is it Legally Binding?
Under Section 90G of the Family Law Act, a post nuptial agreement in Australia is binding for both parties if:
- It is in writing and signed by both parties;
- Before signing the agreement, each party was provided with independent legal advice regarding their rights and the advantages and disadvantages, at the time the advice was provided, to that party of making an agreement;
- Each party is given a signed statement by their legal practitioner outlining their advice;
- A copy of the signed statement is given to the other party or legal practitioner of the other party; and
- The agreement is not been terminated and has not been set aside by the court;
If this agreement is being made between couples who have already divorced, a Separation Declaration may be needed. This proves that the parties have separated without any reasonable likelihood of the relationship resuming.
Speak to a Lawyer About Making a Post Nuptial Agreement in Australia
It can be awkward discussing a post nuptial agreement, especially if you are happily married. Although many couples see it as a way of displaying little faith that the marriage will last, this is not the case. It could be in the best interests of both parties to make such plans for the worst-case scenario to avoid enduring a split more painful than it needs to be. If you need assistance with creating a post nuptial agreement in Australia, please get in touch with our team.