Hypotheticals by Manny Wood. Published in the Coffs Coast Advocate on 20 February 2016.
John and Jane, both in their 60’s, have been dating for several years and John decides to “pop the question”. Jane accepts his proposal and they make plans to get married.
John owns his own home and has a substantial amount of superannuation. He went through a messy divorce and property settlement many years ago.
Jane is also a divorcee, but has not accumulated many assets.
John is concerned that if their relationship breaks-down, Jane may end up with a family law order in her favour and that his children will miss-out on a substantial inheritance.
John consults a solicitor, who advises him to enter into a financial agreement with Jane before their marriage. The solicitor explains that after he drafts the agreement, Jane will need to be independently advised as to the effect of the agreement in order to create a binding arrangement.
The solicitor asks John to disclose his assets for inclusion in the agreement, but John does not want Jane to know about his superannuation and he only discloses one of his two superannuation funds.
Jane sees her own solicitor, who signs a certificate that she has received independent advice. John and Jane sign the agreement and are married soon after.
John and Jane remain married for more than 10 years. Jane cares for John during extended periods of ill-health and attends to the home duties. Jane’s income consists of a part-pension and is unable to save any significant amount during their relationship.
When their relationship breaks down, Jane consults her solicitor, stating that she has discovered a superannuation fund that was not disclosed by John. Enquires are made with the fund and the existence of the fund confirmed.
Jane’s solicitor advises her that the “binding” financial agreement can be set aside on the basis of John’s “failure to disclose a material interest” and “unconscionability”.
Jane commences proceedings and after the court sets aside the agreement, she is awarded the benefit of “splitting orders” granting her a substantial pay-out from John’s superannuation funds.
