In Australia, a couple considering marriage may seek to protect their financial interests by entering into a financial agreement, commonly known as a 'pre-nup'. Parties can enter into a Binding Financial Agreement during cohabitation, prior to marriage or after they have married or commenced living together. The Binding Financial Agreement sets out the division of property in the event of separation and can also deal with spousal maintenance in the event of separation.There are strict legal requirements which must be met for the agreement to be binding and each party must obtain legal advice.A financial agreement will be binding on the parties to the agreement if, and only if:
(a) the agreement is signed by all parties; and
(b) before signing the agreement, each spouse party was provided with independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement; and
(c) either before or after signing the agreement, each spouse party was provided with a signed statement by the legal practitioner stating that the advice referred to in paragraph (b) was provided to that party (whether or not the statement is annexed to the agreement); and
(d) a copy of the statement referred to in paragraph (c) that was provided to a spouse party is given to the other spouse party or to a legal practitioner for the other spouse party; and
(e) the agreement has not been terminated and has not been set aside by a Court.
Parties often enter into a "Pre-nup" or "Cohabitation Agreement" to ensure that they will retain the assets that they each brought in to the relationship. The Agreement can also specify how assets or monies received by inheritance will be dealt with in the event of separation and how assets purchased jointly during the relationship are to be divided.

Such an agreement can bring comfort to individuals (and their families, if appropriate) that they will be financially secure in the event that the relationship breaks down. Families can also be confident that any gifts or inheritances received by a party during the relationship will be retained by the person who received it, as long as this is provided for in the agreement.
A "Pre-Nup" or "Cohabitation Agreement" should not be entered into lightly. If it is binding, each party will receive assets as set out in the Agreement and will not be entitled to a further property settlement under the Family Law Act. Benefits of the agreement include certainty in the event of separation and resolution of financial matters without resorting to litigation.
There are a number of advantages and disadvantages in relation to "pre-nups" or "Cohabitation Agreements" and they differ for each party taking into account their individual circumstances.
If you have any questions in relation to financial agreements and whether it is the right option for you - contact our experienced family lawyers today.
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