Entering into a relationship and want to protect your assets?
Typically, at the end of a de facto relationship or marriage, the general presumption under the Property (Relationships) Act 1976 is that all relationship property (including the family home, family vehicle, furniture and chattels regardless of when or how it was acquired) will be divided equally between the parties who have been living together in a relationship for more than three years.
People often do not want their assets shared, especially if they are bringing into the relationship substantially more assets than the other party. To protect their assets, parties are able to enter into a contracting out agreement (or more commonly referred to as prenup) to determine the ownership and division of their property upon death or separation.
When should you enter into a Contracting Out Agreement?
Talking about what should happen if the relationship ends can often be overwhelming and overly negative, but if your new relationship is becoming serious and you have property you want to protect, it is probably a conversation you should have as soon as possible.
Other times you may also wish to discuss this is when you purchase your first home and make contributions in unequal amounts or if you have children from a previous relationship and want to protect their future inheritance.
It is important to note that this process takes time. It is not a process you want to rush because you are getting married or have been in a relationship for three years.
There are certain requirements that must be met for a Contracting Out Agreement to be valid. These are:
- The agreement must be in writing and signed by both parties.
- Each party must obtain independent legal advice before signing the agreement.
- The signature of each party must be witnessed by their lawyer.
- The lawyer who witnesses the signature must certify that they have provided independent legal advice as to the effects and implications of the agreement.