Living together is a milestone in any relationship.
But these days, because de facto couples have effectively the same rights and obligations as married couples under the Family Law Act – it’s not a decision that should be made without consideration to the financial implications.
Essentially, any assets or debt brought into a relationship individually, or accumulated during the relationship jointly, can be considered communal property, and could become subject to a property settlement claim if the relationship ends.
For younger couples this may not be a consideration. However, for those who have had time to build an asset pool, or those entering a second relationship with accumulated assets from a previous relationship, this may be more of a pertinent issue.
A financial agreement is an option for couples under the Family Law Act, to set out in a legally binding way, how assets and liabilities are to be treated, should the relationship come to an end.
You can make a financial agreement either before you move in together or get married, or during the course of the relationship – making financial agreements a great option for those who want to address financial issues up front.
This might be particularly pertinent, for example, for a party entering a second relationship, who wants to ensure that assets previously accumulated are passed down to his or her children, rather than become a part of the property pool of the new de facto relationship.
Financial Agreements are a legal tool that you can use to clarify how assets and liabilities are owned, and what should happen in the event that the relationship comes to an end at a later time.
Considering that money problems are the number one reason for relationship woes and breakups, it makes sense that a couple should be proactive in their financial affairs.
Financial Agreements can address many issues, including:-
- how assets and liabilities accumulated by separately before the relationship are dealt with;
- how jointly acquired assets will be dealt with and managed; and
- how individual and jointly owned property will divided should the relationship break down.
Financial Agreements allow couples to take control their finances and make their own decisions and choices about how they will be managed.
The Family Law Act makes Financial Agreements accessible to all couples, to promote private agreement and certainty, and minimise the burdens on the Family Court.