Published in the Coffs Coast Advocate on 11 April 2015.
Jane is in her early 60s. Her husband died several years ago and they had 3 children together.
Jane is in the early stages of a relationship with John and is concerned about protecting her assets against any future action that John may initiate if their relationship breaks down. She is particularly concerned about preserving her assets for her children.
Jane consults a solicitor regarding her options. The solicitor advises her that she should consider entering into a binding financial agreement with John. The agreement would allow the parties to decide how their assets will be divided in the event of a breakdown of their relationship.
Her solicitor explains that the agreement would oust the jurisdiction of the Family Law Court when it comes to dividing their assets.
In order to create a binding agreement, John and Jane each need to obtain independent legal advice and each of their solicitors need to execute a certificate declaring that the effect of the agreement has been explained to their respective clients, together with the pros and cons of the arrangement.
John also has children to a previous relationship and is equally keen to preserve his assets in favour of his children.
John and Jane agree that if their relationship breaks down, they will each retain the assets that they brought into the relationship. They also agreed to divide any assets that they accumulate during their relationship equally.
Jane’s solicitor prepares the agreement in the terms that John and Jane have discussed. John receives independent legal advice and after the exchange of the lawyer’s certificates, the agreement is executed by John and Jane and the original is retained in Jane’s solicitor’s safe custody.
Jane is advised that despite the terms of the agreement, it is possible for John to make a claim against her estate when she dies and that in order for John to release his rights to make such a claim, approval from the court is necessary.
Jane decides that in order to protect her estate from such a claim, she will make substantial gifts to each of her children during her lifetime. Such gifts will be protected from a claim, if they are made more than 3 years before her death.
