Recently I have had good news and bad news. The good one was that my very dear clients are getting married. They have been fantastic and financially conscientious before taking this leap into marriage by ensuring their insurances, investment strategy
Recently I have had good news and bad news. The good one was that my very dear clients are getting married. They have been fantastic and financially conscientious before taking this leap into marriage by ensuring their insurances, investment strategy for property growth as well as super was on track to meeting their goals, all the while ensuring they had wills in place. Then the bad news was a girlfriend revealing to me (over several wines) how her and her partner are separating. Never an easy thing to face and the way they had talked about splitting assets was very mature and well structured. However, this is certainly not always the case and as I deal with such emotionally charged milestones in people’s lives, it’s even more important that my team and I have a clear financial strategy that can be easily resolved should a partnership dissolve.
Money matters are one of the leading causes of divorce and the breakdown of what was once upon a time a blossoming relationship.
Modern marriages see both men and women having assets and income, each with their own set of priorities and spending habits. If one partner accrues a large amount of debt or spends frivolously, then it inevitably affects the other. It might seem pessimistic and unromantic to plan for the worst, but it is essential that you give a prenuptial contract considerable thought before tying the knot.
In Australian law, the FLA (Family Law Act) recognises three types of binding agreements: before marriage, during marriage and after separation. A prenuptial contract is one entered into before the marriage and can include, but is not limited to, the following:
• How property will be divided if the marriage breaks down;
• The maintenance of each party during the marriage and if it ends.
If romance gets the better of you both and you get married without a prenup, a financial agreement can also be entered into during the marriage to legally protect the same interests. It would be wise to note that like any other financial agreement a marriage contract can be complex and should not be entered into without sound legal advice.
Without a Binding Financial Agreement, parties have to rely on a Family Court to decide on the division of property if they separate. The court will then order a property settlement that will entitle each party to either give up assets or gain certain assets from the other. The court decides what is most equitable in the circumstances.
If the idea of a court distributing your assets scares you, then you should definitely consider entering into a valid legal agreement with your partner. Bringing this up with you partner can be tricky and awkward, but without dwelling on the negative it could one day turn out to be a level-headed conversation to have kicked off. Both you and your partner can also rest assured that if the agreement is too prejudicial to one party, the court can decide to overrule it.
Although no one wants to plan for the end of a marriage before it’s barely begun, it is quite frankly just sensible thing to do.
You can learn more about more about how achieve financial success post divorce or at any stage of your life with Worthy Women, available to purchase via our website: http://lyfeacademy.com.au/
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