In this video, special counsel Craig Turvey talks about what financial agreements are and how might be the best way to raise the idea with your partner.
Hello. My name's Craig Turvey. I'm a special counsel at Cooper Grace Ward in the family law team and today I'd like to talk to you about financial agreements and how to bring them up with your partner.
What is a financial agreement?
A financial agreement is a private agreement between at least two people and it details how your assets will be divided if you separate or if you've separated, what the division of property is. In terms of the former category, it's quite surprising the number of people who will come and see us saying, 'I want a financial agreement, but I haven't really discussed it with my partner. We've sort of talked about it, not in any real detail, but I wanted to protect myself. Can you just draft something up?'
Why you need to talk to your partner about a financial agreement
A financial agreement, it's a pretty unromantic document, like it's detailing what's going to happen if you separate. So, it's one of those things that you really need to talk to your partner about in quite a lot of detail and obviously with the assistance of a lawyer so you know what sort of issues you can broach in the agreement. But it's much, much better if it comes from you directly in terms of the conversation rather than the lawyer. A lot of times clients will say, 'no, no, just draft it, send it off', because really that's making us do the hard work for them, I guess. So that they don't have to have those difficult conversations and that's fine. We can do that. But this is your relationship. It's usually much better coming from you in terms of what the risks are, what the issues are that you need to talk about so they can think about it. Rather than getting this very long winded, complex legal document and getting advice for the first time from their lawyer.
Ways to approach the conversation
So, we always try to talk to clients about, look, these are the ways that you broach things. One of the better options, I think, is just to be very frank with people and say, look, I've either been through a property settlement myself, or I know other people who have and I know if it goes pear shaped, it can be a really bad experience for both of us. So, the purpose of the document is just to make sure that if we separate, this thing says exactly what's going to happen. We don't need to fight. There doesn't need to be all these long winded, protracted negotiations that everyone else has. It's just a very straightforward division. Having that sort of frank discussion with your partner is really good. Or particularly if you've been through a property settlement before, just being very frank and saying, 'well look, I've been through this. It was a horrible experience, I just, I can't go through it again. It's just too much'.
When children are involved
And particularly if you're perhaps of a certain age and you've got adult children or young children that you're worried about losing assets and having your financial position deteriorate if you separate. Just being very frank and saying, well look, I'm trying to preserve as much as I can for my children. It's quite common where people get together at an older age, they might have adult children separately and they're both just happy to leave their estates effectively to their children and they want the financial agreement to be consistent with that. But just having a very frank conversation is really important and obviously having a chat with a family lawyer first about what the important issues are so you can broach them with your partner.
Cooper Grace Ward is a leading Australian law firm based in Brisbane.
This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please contact Cooper Grace Ward Lawyers.