Do you need a financial agreement checklist? Here’s one!
In Australia, marriage breakdowns and de facto relationship separations can be incredibly difficult experiences for all the parties involved because of the emotional, financial, and legal complexities. Thus, the Family Law Act 1975 provides guidelines for the legal and financial aspects of separation for both married and couples in a de facto relationship.
Under the Act, couples can opt for financial agreements to predetermine how their finances will be handled in the event of separation. However, entering into a financial agreement is an important decision.
Thus, seeking professional legal advice must be done to ensure that you fully understand the implications of your agreement. To guide you in drafting your agreement, we crafted this checklist to serve as your general reference.
Consultation With a Family Lawyer
To guide you through your legal consultation for your financial agreement drafting, here’s a checklist of questions that you may want to ask your family lawyer. Going through these questions will help you understand why you need to have an agreement and what you should do:
- Understanding the agreement:
- What are the different types of financial agreements available in my case (e.g., pre-nuptial, post-nuptial, separation agreement, binding financial agreement)?
- What are the key terms and conditions of the proposed agreement?
- What are my rights and obligations under the agreement?
- Are there any tax implications associated with the agreement?
- How will the agreement be enforced if there are any problems like disputes with financial resources?
- Negotiating the agreement:
- What are the strengths and weaknesses of my case?
- What is a fair outcome for me in this situation?
- What strategies can I use to negotiate a favorable agreement?
- Should I consider mediation or other alternative dispute resolution methods?
- What are the potential costs of litigation if we cannot reach an agreement?
- Understanding your lawyer’s role:
- What is your experience with similar cases?
- What is your fee structure?
- How will you keep me informed about the progress of my case?
- Who else will be working on my case?
- How can I best communicate with you?
- Additional questions:
- What happens if my financial circumstances change in the future?
- What happens if I or my partner dies?
- How will this agreement affect my children?
- Are there any other legal documents I should consider, such as a will or trust?
Documents Checklist
During consultation, you must prepare ahead of time the relevant documents so that when the lawyer asks you questions regarding your financial details, you can immediately provide it to them.
When creating a financial agreement in family law, it is important to provide full and frank financial disclosure. The following documents are typically needed when preparing for a property settlement or a financial agreement:
- 12 months’ worth of bank statements
- Income tax returns and notices of assessment
- Superannuation statements
- Records of any stocks, shares, or other investments
- Evidence of earnings such as payslips and group certificates
- Documentation of any property purchased or disposed of in the 12 months prior to separation
- Evidence of any financial contributions made to the relationship, including inheritance
- Documentation concerning your health, such as medical reports about any illness, condition, or injury.
Step-by-Step Process
To give you an overview of what’s going to happen, here’s the step-by-step process of creating a financial agreement:
- Seek Legal Advice. Before entering into this agreement, each party must have received independent legal advice from a qualified lawyer. This is a mandatory requirement under the Family Law Act 1975.
- Financial Disclosure. Both parties must provide full and frank financial disclosure, including assets, liabilities, income, expenses, and resources. This is essential to ensure that both parties are fully informed about the financial circumstances.
- Drafting the Agreement. Once legal advice has been obtained and financial disclosure provided, the parties’ lawyers will help draft the agreement. The agreement must comply with the strict formalities set out in the Family Law Act.
- Execution of the Agreement. The agreement is then executed by the parties. It is important to note that an agreement, once prepared, is executed by the parties without the court’s oversight.
- Binding Nature. If the agreement is prepared and entered into properly, it can be a way to ‘contract out’ of court proceedings. A binding financial agreement alters the normal avenue for the division of property and other financial matters, provided it is legally binding and enforceable.
Having an agreement ready will ease the burden of the separation process. Not having one in place after a divorce in Australia can lead to legal, financial, and emotional challenges, as well as a lack of control over the division of property and finances.
Tips For Creating a Financial Agreement
- Negotiate in good faith. Both parties should approach negotiations with fairness and open communication. Consider mediation if needed.
- Review thoroughly. Give yourselves ample time to review the agreement with your lawyers, ask questions, and propose revisions.
- Formalise and sign. Once finalised, have the informal agreement properly signed and witnessed as required by law. Such agreeents will then turn into binding financial agreements.
- Be realistic. Focus on practicality and fairness, considering long-term implications rather than short-term desires.
- Communicate openly. Maintain open and honest communication throughout the process to avoid misunderstandings and resentment.
- Flexibility and compromise. Be willing to compromise on certain points to reach a mutually agreeable solution.
- Review and update. Regularly review the agreement, especially after significant life changes, and update it as needed.
Remember, these are just general tips, and the specific advice you need will depend on your unique circumstances. Consulting with a qualified family law attorney will help ensure a fair and legally sound agreement that upholds your interests and protects your future.
Other Articles That Might Help
If you want to read more about creating a financial agreement, we have several articles focused on different topics about financial agreements. Feel free to read them through the links below:
- Financial Agreements Family Law
- De Facto Financial Agreements
- Other Provisions About Financial Agreements
- Additional Provisions for Financial Agreements
- Can a Binding Financial Agreement be Overturned?
- Separation Financial Agreement
- Other Rules on FLA Orders and Financial Agreements
Obtain Independent Legal Advice From Our Family Lawyers
Safeguarding your financial future and fostering family harmony can feel daunting during uncertain times. But married couples and people in de facto relationships don’t have go at it alone.
Our experienced family lawyers at JB Solicitors specialise in crafting clear, comprehensive agreements or filing consent orders that protect your individual assets and prioritise family well-being.
Schedule a confidential consultation today and empower yourself with legal expertise tailored to your unique needs. Contact us today and take control of your financial future and property arrangements with confidence.