Forget the romance, get it in writing

prenuptial-agreementPrenuptial agreements will protect your assets, writes Bina Brown.

Binding financial agreements are hardly the most romantic of topics for a couple to discuss before they get married or move in together but it is for good reason that they should be raised early in any new relationship.

If you find it hard to talk about your financial position and assets with a loved one over dinner, imagine how hard it will be in the Family Court.

An open airing of all matters financial is exactly what could eventuate if a relationship – whether it is de facto, same-sex or marriage – ends and there is no clear definition of who should get what.

The principal of financial advice company BFG Financial, Suzanne Hadden, says: “If you can’t be frank and upfront together about your assets and liabilities, then what are you doing getting married or moving in?”

One of the more formal ways to document exactly how you both expect assets and liabilities to be divvied up in the event of a break-up is through a binding financial agreement (BFA), which is recognised in the Family Court. Commonly referred to as a prenuptial agreement, a BFA is a legally binding agreement made between two people setting out the division of property in the event of relationship breakdown and other financial issues that might apply during the relationship or separation.

Those most likely to use a BFA are people who have been in an unsuccessful relationship before, have significant wealth prior to entering into a relationship, need to provide for children of a previous relationship, or who want to ensure they will not end up in court fighting over the division of assets if the relationship does not work out.

A partner at family law firm Watts McCray, Jeff Marhinin, says not everyone will make important financial decisions at the start of a new relationship but those conversations should take place early on.

He says discussions about finances and assets may be particularly relevant to people entering a second marriage following a long-term relationship, couples with children from previous relationships, young professionals who have built up substantial assets and the rich and famous who have large amounts of wealth behind them.

“It is not very romantic but planning what people would like to see happen in the event they do break up can be very important. It comes down to whether they want to work things out in the spotlight of the Family Court or cleanly and privately,” Marhinin says.

Couples should also discuss everyday financial matters, such as who will pay bills and other expenses. Marhinin says this should be as much of a priority as defining what would happen if the relationship ends.

Hadden says couples moving in together who want to keep their cash and other assets separate will still have financial issues to discuss, such as how the household budget will be managed.

One common approach is to open a joint account for bill-paying purposes and to meet household expenses. Other financial conversations might be around people’s attitudes to money.

“You might start off with everything separate but over the years things may start to merge. It will help to know what assets and liabilities someone has,” Hadden says.

She warns it’s easy for someone to get “sexually transmitted debt” if they don’t know what a partner is up to with their money.

“You could find your assets being used as security for a partner’s loan or you may authorise a second credit card, which means you are liable,” she says.

One of the most dangerous things to do without any form of protection is to act as guarantor for someone else’s loan. You will have to repay it if the other person fails to do so.

Hadden says couples should talk about insurance and what would happen if one person was to lose their income or to die and who would receive super fund benefits in the event of death.

They could also agree on what they identify as joint or shared property and what should be kept separate – and what would happen if one person received an inheritance.

The division of assets within the Family Court can become complicated once a couple has been living together for two years, or less if one person has made a substantial contribution or you have a child.


Imagine that, on the eve of your wedding, your fiance says: “Darling, I love you but I want you to sign this.” If that’s one of the worst ways to approach a financial agreement, then one of the best is to work it out together.

Binding financial agreements (BFA), also known as prenups, are a way of working out who should get what if a relationship ends. A family law specialist, Caroline Counsel, says it’s better for couples to work together on a BFA than to write separate agreements and present them to each other as a fait accompli.

“I have known relationships to end when one party’s lawyer drafts an agreement that solely represents one half of the equation,” Counsel says. “Nobody wants to think about what happens if a relationship ends early or what happens to property or who has to move out if it does end but they are all things that should be discussed and in a supportive environment.

“Trained collaborative financial advisers and lawyers can assist with the difficult conversations that none of us are taught, like what happens if one of us gets an inheritance: is it my money or shared money? How do you feel about money? Or how is someone who has a child in their care going to be protected if a relationship does end?”

It is a legal requirement that each person gets independent legal advice about a BFA. The lawyers representing each person sign an agreement that if the relationship ever goes sour and the BFA is challenged, the two lawyers who helped discuss the contents will not represent either person in court.

“In other words, we are guaranteeing a complete cone of silence around their discussions,” Counsel says.

A good agreement for a couple is one that is signed and put away, never to be thought of again.

“A bad agreement is one that hangs around like a third party and sits like a cold, hard rock in the bed between a couple,” she says. .

Parents to sterilise daughter, aged 11

mother-and-sonTHE Family Court has given a Queensland couple permission to have a hysterectomy performed on their profoundly disabled 11-year-old daughter. 

The decision prompted an immediate reaction from disability organisations, who describe forced sterilisation of any girl as an abuse of human rights.

“It is only ever the disabled girls,” said Carolyn Frohmader, chief executive of Women with a Disability Australia, which has agitated for years for a law that would ban the sterilisation of disabled children.

“When you go through the cases, there is never a boy, no matter how intellectually disabled, who has to be sterilised.”

The executive director of People with Disabilities Australia, Therese Sands, said she was “alarmed to hear that children are still being sterilised”.

“It is our view that nobody has the right to sterilise a child, not a judge, not a parent, not unless it’s a matter of life or death.”

But National Council on Intellectual Disability executive director Mark Patterson said the issue “is a very difficult one”.

“We take the pragmatic approach. It doesn’t help families in their day-to-day lives if we say we are not going to allow sterilisation,” he said.

The child in question, Angela, has Retts syndrome. She is profoundly disabled, and unable to communicate.

She began menstruating at age nine, and her parents believe that her periods trigger epileptic fits.

They wanted Angela to have a hysterectomy — the removal of her womb — to stop the periods and lessen her distress. Other treatments had failed.

Parents are ordinarily able to make decisions about medical treatment for their children, but in 1992 the High Court, in a case involving the sterilisation of a teenage girl known as Marion, found that serious, invasive, irreversible medical procedures require the permission not of parents but of the courts. In the matter of Angela, judge Paul Cronin said he made the order to improve Angela’s quality of life.

Retts syndrome is a progressive neurological disorder. Angela cannot talk and does not have the co-ordination to use sign language. She “acts as a three-month-old baby would”. She has a special walking frame into which she has to be strapped because she cannot stand supported alone.

Angela’s mother told the court that epileptic seizures appeared to be triggered by Angela’s menstrual periods, which also caused her pain and fatigue.

Three of Queensland’s leading gynaecologists agreed a hysterectomy was the best treatment.

Family law unable to back mum on new life

relocationA CHILD’S right to a meaningful relationship with his or her father trumps a woman’s right to pursue personal happiness after divorce, according to the latest ruling on the matter by a Family Court magistrate. 

In a judgment handed down in Melbourne, federal magistrate Evelyn Bender acknowledged that some women feel compelled to “start fresh” after divorce by leaving town, with the children.

Until recently, they had mostly been allowed to go their way, on the grounds that happy mothers meant happy children.

However, the shared parenting law, brought in by the Howard government in 2006, shifted the pendulum toward a child’s right to have the father involved in all aspects of life, including weekday meals, weekend sports, overnight stays and parent-teacher nights.

The shared parenting law is the subject of a government review.

In the most recent case, known as Bachman and Bachman, the wife, aged 25, tried to get permission to move to a town 100km away from the home she had shared with her former husband, taking their sons, aged six and two, with her.

The court banned the move, saying the woman could not move beyond a 30-40km radius of her former husband’s home with the children.

The couple had separated after the wife contracted gonorrhoea from her husband after he returned from a business trip to Indonesia.

The court accepted that the wife was unhappy and lonely in the Victorian town where she lived, which was badly damaged in the Black Saturday bushfires.

The husband told the court he “wished to be involved in all aspects of the boys’ lives” during the week, including Auskick, and that was not possible if his former wife moved more than 30km away.

Ms Bender said she accepted that the wife was unhappy in the town and “genuinely believes the move will provide a more positive and fulfilling life”.

However, the law was clear that the child’s welfare had priority, she said.

Mother’s legal fight to be only ’mum’

family court disputeAN Adelaide mother went to court to prevent her daughter from referring to her ex-husband’s new wife as “Mum” or “Mummy” or “my other Mummy”.

‘The woman, who cannot be named, argued that her ex-husband was deliberately undermining her role as their child’s mother, by encouraging his new wife to answer to the terms “Mum” and “Mummy” and “Mummy-D” (D being the first letter of the stepmother’s first name.)

The battle has been going on for almost as long as the child has been able to speak. Her parents separated when she was four months old.

The Family Court case sets a precedent for Australia’s million-strong blended families, where arguments over who is to be called what are commonplace.

In the Adelaide case, the mother, known in court documents as Ms Klement, argued that the stepmother should not be permitted to refer to herself “as a motherly figure”.

By consent, her ex-husband agreed that his new wife should not be “Mum or “Mummy” but thought “Mummy-D” was fine.

The mother said the father was “attempting to replace her as the child’s mother by encouraging the child to call his new wife “Mum”. She said the new wife would sign the child’s school notes “Mum” and take the child to medical appointments, where she “presented herself as the mother”.

Ms Klement was “adamant that the child should only call her Mum” or any variation of “Mum”.

The stepmother rejects the accusation that she presents herself as the child’s mother.

The court declined to make an order that the child not refer to her stepmother as “Mummy-D” in part because the judge was concerned that such an order would lead to further litigation “where it would be up to the court to determine whether the father had breached the order in relation to encouraging the child to use the term Mummy-D”.

The court also expressed hope that the child would grow out of “Mummy-D” and begin calling her stepmother by her first name.

It was the only dispute between the separated couple.

All other matters, including where the child should live and go to school, and how much child support should be paid, had been settled in pre-court mediation, after more than six years of litigation.

The parents have a shared care arrangement.

Secret web of sorrow when parents move on

online-romancesAN EXPLOSION in online romances is making the toughest Family Court issue even tougher, with more divorcees than ever wanting to move their children interstate or overseas to be with a new partner.

A world-first study of 80 parents involved in relocation disputes shows online dating is having a devastating impact on already-broken homes, putting an average distance of 1646 kilometres between children and the parent left behind.

Parents are being bankrupted, selling their homes, losing contact with their children or travelling long distances only to have visitation rights denied.

The average legal cost for settled divorces is $50,000, and $75,000 for court cases.

Results of the study suggest some parents are not upfront about new relationships when they go to court asking to relocate their children.

University of Sydney researchers have been following 40 men and 40 women involved in 71 relocation cases since 2006. They say the growth of internet romances is combining with a rise in broken relationships, increases in international mobility and the tyranny of distances in Australia to make relocation a more vexed issue than ever.

”Internet-based introduction services have radically increased the opportunities for separated parents to meet new people, and the connections thus formed are supported by very cheap modes of communication such as email, internet ‘chat’ programs, and web-based telephone or video communication,” Professor Patrick Parkinson, Associate Professor Judy Cashmore and Judi Single wrote in an article for US journal Family Law Quarterly.

While less than a quarter of women surveyed said they wanted to move due to a new relationship, about a third of men believed it was a factor in their ex-partner’s decision. ”The fathers’ accounts indicated the possibility that in certain cases the existence of a new partner might not have been disclosed to the court,” the authors wrote.

The legal costs of relocating often reached hundreds of thousands of dollars and the costs of maintaining contact with children were as much as $15,000 a year.

This led the authors to urge lawyers and judges to test if the moves were realistic before encouraging them.

Relocation disputes are ”the San Andreas fault of family law”, according to former Family Court judge Richard Chisholm. They are the most difficult decisions judges must make.

The disputes end in expensive court cases more than any other family law matter, with 59 per cent decided by a judge (four times the general rate). And it is almost always the mother who wants to move, making gender a major issue in the debate.

A High Court decision last week swung the pendulum slightly back in favour of parents wanting to relocate.

In a high-profile case code-named ”Rosa v Rosa”, a mother had been forced to remain in a Queensland caravan park, depressed and living on welfare payments, after she moved there from Sydney for her husband’s mining career and they separated. The High Court said the decision was wrong and ordered a fresh hearing.

Judges will have to ask whether an arrangement is ”practicable” before they can make orders for equal time in future.

About 23,000 divorces, half involving children, are granted in Australia each year.

High Court rejects shared parenting plan

high-courtA court order requiring a Sydney mother and Mount Isa father to share parenting of their seven-year-old might have been in the child’s best interests, but it just wasn’t feasible, the High Court has ruled.

High Court judges said the Federal Court magistrate who made the original order should have considered whether it was actually practicable for the daughter to spend equal time or even substantial time with each parent.

The High Court initially handed down its decision in December but only released its reasons on Wednesday.

The court heard the couple lived together in Sydney from 1993 until 2007, and their daughter had been born in August 2002.

In January 2007 the family moved to Mount Isa to allow the husband to gain work experience.

The parents separated in August 2007, with the mother and daughter returning to Sydney. But three months later they returned to Mount Isa in accordance with interim orders sought by the father and made by the Federal Magistrates Court.

Final orders, made in April 2008, gave the parents equal shared responsibility for their daughter and directed that she spend equal time with each parent on the basis that both would live in Mount Isa.

The Full Court of the Family Court dismissed the mother’s appeal, but the High Court took a different view.

Judges noted that the legislation stipulated that a child’s best interests were to be the paramount consideration in parenting orders, with a presumption that this could be best achieved by parents sharing responsibility.

However, that presumption could be rebutted, with the legislation also requiring consideration of the parents’ circumstances, particularly the mother.

In this case, the mother was living in a caravan park and relying on welfare payments and income from casual work, with her daughter staying with her every second week.

The mother was also suffering depression from her poor living conditions, lack of employment opportunities and isolation from her family in Sydney.

The High Court judges said the federal magistrate addressed only the question of whether it was in the child’s best interests for her to spend equal time with each parent.

He made no assessment of whether spending equal time with each parent was actually feasible, they said.

“Had consideration been given to the question, only one conclusion could have been reached, one which did not permit the making of the order,” they said.

The case was sent back to the Federal Magistrates Court to be reheard.

Spouses to get estates when partners leave will

Last Will and TestamentSPOUSES will automatically inherit the estates of their partners when they do not leave a will, under new laws that come into force in NSW today.

Previously, estates of people who died intestate were distributed between spouses and their children.

Under the new laws, children will not be automatically included in the inheritance unless they are from a previous relationship.

NSW Attorney-General John Hatzistergos said the new laws made the administration of an estate much simpler in the case of a person without a will who died leaving a spouse or partner and children of the relationship.

“When people die without leaving a will, there is the potential for emotionally charged disputes and legal action as relatives fight over the estate,” Mr Hatzistergos said.

“To defuse disputes and simplify the process of dividing an estate, it is important that intestacy laws accurately reflect community attitudes with regard to who should benefit.

“The overriding message here is – avoid any confusion and get a will.”

Mr Hatzistergos said under other changes to intestacy laws, cousins will be recognised as eligible heirs to the estates of people who die intestate.

The entitlements of first cousins would come in order of importance after spouses and children; parents; siblings; grandparents; aunts and uncles.

“The new law will widen the pool of people who can inherit in NSW and recognises that some other jurisdictions in Australia include first cousins in the distribution list under intestacy laws.”

Estates of people in these circumstances would have previously gone to the Crown.

Intestacy is the default method of distributing someone’s estate in the event of a person not having a valid will in place.

The NSW Trustee and Guardians 2009 Omnibus Newspoll Survey showed 46 per cent of people do not have a will.