Combined Defacto and ‘Pre-nup’ Pre-Marriage Financial Agreements Determined to be Valid

Talking with your partner about entering into a binding financial agreement, or a ‘pre-nup’ as they are sometimes known, is a difficult enough conversation.

Making it more difficult, the Family Law Act 1975 provides that if you are in a defacto relationship, and enter into an agreement under the defacto sections of the law, that agreement will come to an end and cease to be effective upon marriage.

Quite why this is the case has never been clear to the legal profession at large, but most lawyers have advised then that parties considering marriage with an existing agreement should re-enter a new agreement at that time.

This often doubles the cost of getting a financial agreement and both parties have to attend at lawyers again to obtain what often amounts to very similar advice.

A newly-published case (Piper & Mueller [2015] http://www.austlii.edu.au/au/cases/cth/FamCAFC/2015/241.html)  however states that a financial agreement is able to be both a defacto agreement – pursuant to s90UC of the Family Law Act – as well as a pre-marriage agreement – pursuant to s90B of the Family Law Act.

The rationale is that the agreements do not conflict with each other because the portion of the agreement that relates to being under the defacto laws ‘falls away’ when the parties marry, as a result of that same troublesome piece of the law that caused difficulty above.

This means that parties can save considerable cost, as well as time and stress, by having an agreement drafted during their defacto relationship that is put into operation with marriage.

Our lawyers would be pleased to assist you with that type of agreement and answer any questions you have about these agreements.

You can call us on 03 9614 7111 or email Melbourne@nevettford.com.au

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The Small Business Family Law Dilemma

Clients with small businesses often find themselves gobsmacked at the approach that the family law courts may take in relation to their business. A valuer will regularly be appointed at significant expense and that valuer will place an astronomical value on a business that the client has no ability to sell, leaving them with a fixed asset of paper-worth but little by way of realisable value.

 

The situation that may result is a difficult one for many small business owners to face – that they will be left with just their personal-services business whilst their former spouse will keep the whole of a house and a significant proportion of their superannuation to boot.

 

Clients on the other side of this equation will often not appreciate the precariousness of a valuation that may come falling apart, or indeed how a business owner might readily lower their business incomes dramatically to avoid a genuine valuation of the business occurring. Recent developments in the law regarding how ‘add-backs’ are considered mean that this becomes a particular risk for parties to family law disputes.

 

Not even considered in this situation yet is the impact such a valuation, or the forensic accounting exercise undertaken to get to a valuation, may have on the business partner(s) of a person undergoing a family law property division.

 

Judicious and early advice is the best answer to help you deal with the complex web of outcomes in such a situation, whether you operate the business or are the former spouse of such a person.

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Does the amount of contact with your children affect your entitlement to receive Family Tax Benefit A or other Family Assistance Payments?

The short answer is yes.

A contact parent who has ”regular care” to the children i.e. 52 to 127 nights (2 to 4 nights a fortnight) may not get Family Tax Benefit A or other family assistance payments.

A contact parent who has “shared care” to the children, between 128 to 237 nights a year (5 to 9 nights a fortnight), both parents may receive family assistance payment and both parents can share in the Family Tax Benefit Part A.

A parent who has the children live with them over 86% of the time, i.e. 314 nights a year as a minimum, receive 100% of the Family Tax Benefit Part A.

The level of child support recognises shared parenting and the contact each parent makes towards the costs of the children through direct care. 

Please contact Nevett Ford Lawyers on 03 9614 7111 if you have queries about Child Support.

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Why Hire a Family Lawyer?

Why Hire a Family Lawyer?

Many people balk at the idea of hiring a family lawyer for a variety of reasons, including the cost of the exercise, and the feeling that they do not want to invite a stranger into the most intimate details of their lives. The Court has made services accessible to the public at large that helps to foster peoples’ easy and cost effective access to justice including:

• All Court forms being readily accessible online, with how-to guides for popular documents
• Providing ‘duty lawyer’ services at Court so that individuals can access basic advice even on their Court date
• Providing significant accommodation, time and patience to parties who are ‘self-representing’ when they are in front of a Judge

All a lawyer seems to do to most people is to manipulate words, and if you can speak, so the logic goes, you can be your own lawyer. There are fewer people who feel the same way however about accessing other professionals, and few are game enough to do their own plumbing or service their own car, despite the arguably ‘higher stakes’ involved in a bitter family law dispute. In short, investment in a lawyer for your family law matter has a significant number of advantages:

• Getting forms and documents ‘right’ the first time
• Knowing what is going to help, and what is going to hinder you
• Knowing from an early stage what the likely range of outcomes for your matter is going to be
• Accessing expert and experienced strategic advice in relation to your matter, and with the best law firms, expert advice on how various Judges, Courts, Registrars and Registries will react to certain issues
• Having an expert who is suitably objective to provide you with ‘reality testing’ at every step of the process

Hiring a lawyer does not have to be an all-or-nothing approach either; many law firms are now offering packaged work or strategic intervention, to assist you for example with finalising documents in preparation for trial, simply appearing for you and avoiding the cost of back-and-forth in letters, or reviewing your situation early so that you can negotiate an outcome directly with your former partner. We offer these types of services and encourage you to contact us to discuss your situation today.

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The Small Business Family Law Dilemma

Clients with small businesses often find themselves gobsmacked at the approach that the family law courts may take in relation to their business. A valuer is often appointed at significant expense and that valuer will place an astronomical value on a business that the client has no ability to sell, leaving them with a fixed asset of paper-worth but little by way of realisable value.

The situation that may result is a difficult one for many small business owners to face – that they will be left with just their personal-services business whilst their former spouse will keep the whole of a house and a significant proportion of their superannuation to boot.

Clients on the other side of this equation will often not appreciate the precariousness of the valuation that may come falling apart, or indeed how a business owner might readily lower their business incomes dramatically to avoid a genuine valuation of the business occur. Recent developments in the law regarding how ‘add-backs’ are considered mean that this becomes a particular risk for parties.

Not even considered in this situation yet is the impact such a valuation, or the forensic accounting exercise undertaken to get to a valuation, may have on the business partner(s) of a person undergoing a family law property division.

Judicious and early advice is the best answer to help you deal with the complex web of outcomes in such a situation, whether you operate the business or are the former spouse of such a person.

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Can I register for Child Support when one parent lives overseas?

Either parent may be able to:

• Apply for an Australian child support assessment;
• Register a Maintenance Order, Assessment or Agreement from another country for collection in Australia if the Order, Assessment or Agreement was established in a country listed as a reciprocating jurisdiction for Australia;
• Obtain an Australian Court Order requiring the other party to pay child support. An Australian Court Order can be registered with the Child Support Agency for collection. Collection options can be limited however, where a paying parent lives overseas especially if the parent lives in a country that is not listed as a reciprocating jurisdiction for Australia.

Please contact Nevett Ford Lawyers on 03 9614 7111 for further advice in this complex area.

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The Future of the Binding Financial Agreement

'Pre-nuptial’ Binding Financial Agreements are an important tool available to the cautious and well-prepared traveller through life.

They are particularly widely-requested from parties who have already been through one hotly-contested relationship breakdown and with good reason

These parties will often appreciate what people who have not been through litigation before will not; namely that any document or record of what happened at the beginning of a relationship is an invaluable tool should a relationship end.

They also have a more acute understanding of the legal system and the difficulties they may face in actually enforcing such a document, and so lawyers can take greater comfort in their client’s appreciation of this unavoidable difficulty.

The publicity surrounding swimmer Grant Hackett’s case, and his subsequently bringing claims against his former law firms will on the other hand give even greater pause to family lawyers than many already feel. Whatever the outcome, there will be valuable learning experiences in the case, and wise family lawyers will further strengthen and hone their advice as a result.

In the grand scheme of family law in Australia, the Binding Financial Agreement remains a novel document. Family lawyers should act accordingly cautiously, but at the same time take advantage of and advise about the advantages these documents can present to clients. They may form one part of a comprehensive asset-protection strategy, particularly for clients with an interest in a business or a small business with other partners.

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