Recently, it was revealed that the Federal Government (thanks Mr Labor Attorney-General and staff) had forgotten to proclaim a date from which the Family Court and Federal Magistrates Court could exercise jurisdiction in de facto property settlement and maintenance cases.

In strict legal theory, this means that Orders made in relation to financial outcomes for De Facto couples between 01.03.2009 and 11.02.2012 were made without legislative authority and ought be considered arguably invalid.

A rather huge mistake don’t you think?

The Family Law Act 1975 was amended by the Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 (the De Facto Act) to cover financial matters for de facto couples. It could not commence until proclamation which did not occur until (on 9 February 2012) the Governor-General made a proclamation fixing 11 February 2012 as the date on and after which the jurisdiction of the Family Court (FCOA) in relation to de facto financial causes could be exercised.

The date applies equally to the Federal Magistrates Court (FMCA) when it exercises de facto financial jurisdiction.

In respect of Queensland and some other States, it would appear that the period between the commencement of the relevant parts of the De Facto Act on 1 March 2009 and 11 February 2012, the Courts (the FCOA and FMCA) did not have jurisdiction.

Clearly, the remedy must be that the Federal Government ought to promptly draft and pass retrospective legislation, making all Orders during the period in question valid.

For the time being however, it is unknown how and when this issue will be resolved and as such the effectiveness of all Orders made during the period unclear.

Heads ought roll given the failure to ensure that checks and balances were not followed in the normal processing of legislation so as to it can be given effect.

Fancy the Government overlooking such an important matter and leaving litigants Courts and lawyers in limbo.

There are plenty of reasons why parties to a marriage breakdown should formalise their property settlement.

An example that most people probably do not turn their minds to is the lotto win years after separation.  Imagine if you separate from your spouse, divide your modest assets by agreement and decide not to take the time or effort to formalise the agreement.  5 years later you purchase a lotto ticket and “jackpot baby” you win $5million.  A few months later, life is going great and you receive a knock at the door.  You are being served with a Family Court Application, where your Ex makes a claim for $2million of your lotto win.

You quickly make an appointment with a family lawyer and to your absolute horror you are advised that your estranged spouse has a genuine claim which is recognised at law.

Even if you only have a modest pool of property, it is worth taking advice from a Solicitor specialising in Family Law and formalising property settlement.

There is currently much debate in Australia about whether same sex couples ought be entitled to be married. 

Whatever your views on the issue, the reality is that in Queensland, and other Australian States and Territories, same sex couples have the same rights as married couples in property settlement disputes.

Any same sex couple who have separated post 1^st March, 2009 who can satisfy the relationship threshold test and geographical requirement can apply for the same relief as married couples under the Family Law Act with respect to division of their property and future payments of maintenance.

There are strict time limits which apply and if you have been in a same sex relationship which has broken down you should immediately seek out advice from a Solicitor specialising in the area of family law.

Gold Coast Family Lawyer, Luke Brandon, has won the Highest Achiever Award for the 2011 Qld Law Society Accredited Specialist Program in Family Law.

In results published to participants, Mr Brandon topped the course for those seeking accreditation in 2011. The QLD Law Society 2011 Accredited Specialist Family Law Program saw only 35% of participants successfully meet strict requirements and the judgment of assessment pieces submitted during the year.

Mr Brandon, who this year became a partner at Evans & Company Family Lawyers, will be awarded his Certificate of Accreditation and the Highest Achiever in the 2011 Family Law Specialist Program Trophy by the Honourable Paul De Jersey, Chief Justice of the Supreme Court of Queensland on 2nd December, 2011 at a breakfast held for Accredited Specialists annually.

Mr Brandon commented that he was relieved when he received his results letter from the Law Society knowing the course was notoriously hard to pass. The news that he had topped the program was icing on the cake.

Mr Brandon credits his outstanding result to both plenty of study and the mentoring he received during his employment at Evans & Company Family Lawyers, a long term job he has held since graduation from university and at which he completed his articles of clerkship.

Mr Brandon was articled to Dean Evans who is also an Accredited Family Law Specialist and who established Evans and Company Family Lawyers in 1998 as a boutique Firm handling Family Law and De Facto Relationships Law matters.

Mr Evans commented that he was proud of the achievements of Mr Brandon as a lawyer and of his work whilst an employee of the firm – achievements which have led to partnership for Mr Brandon.

Mr Brandon acknowledges the importance of the Specialist Accreditation Program, noting that in recent times there have been many Solicitors taking up the practice of family law following the reduced work in personal injuries law and the general lack of work in commercial litigation. Mr Brandon commented “Most people will only go through a marriage or de facto relationship break down once or twice in a lifetime. It is a very stressful and emotionally charged event which can be exacerbated by having poor legal representation. The Family Law Specialist Accreditation Program recognises the top family law practitioners in Queensland and provides the public with the assurance that if they take up representation by an Accredited Specialist, they will be competently represented”.

Offered at no cost to Gold Coast residents, Evans and Company Family Lawyers hold family law seminars periodically throughout the year.
About Evans and Company Family Lawyers
Boutique Gold Coast Family Law Firm exclusively dealing in family and de facto relationship law situated at Level 2, 142 Bundall Road, Bundall

1. Introduction

1.1 The comments made on the Money Matters program are made to provide a general overview of pre-nuptial agreements. The advice should not be treated as specifically applicable in your case and you should consult an experienced family law practitioner if you wish to enter or review an existing prenuptial agreement. This is because each facto scenario is different and all fact scenarios will not receive the same advice.

2. The ‘Concept of a Pre-Nuptial’ Agreement

2.1. A prenuptial agreement or “prenup” is the socially-used term which describes a Binding Financial Agreement made pursuant to the Family Law Act 1975.

2.2. Whatever name you use, it is a contract, designed to pre-determine the financial outcome for each spouse upon the conclusion of a marriage and now also a de facto relationship, although we would call those agreements simply binding financial agreements.

2.3-. Pre-nuptial agreements are dealt with by the Family Law Act 1975. For parties entering a marriage, the Family Law Act ‘|975 has governed pre-nuptial agreements since 2000 and for parties entering a de facto relationship, the Family Law Act 1975 has governed binding financial agreements for de facto couples commencing their relationship since 15“ March, 2009. Prior to the latter date, de facto couples could enter an agreement if permitted by the laws of their home State.

2.4. Same sex couples are still governed by the laws of their own State and should absolutely seek specific advice from their own lawyer.

3. Their Prevalence

3.1 Unlike the United States, where legislation has been on foot since 1983, Australia is only now beginning to embrace Agreements being negotiated and entered at the start of a relationship as opposed to trying to resolve matters at the end of a relationship.

3.2. Their prevalence is increasing in Australia primarily as a result of:-

3.2.1. Increased public awareness of their existence as a result Of media Commentary; and

3.2.2. Increased focus as a result of well-publicised asset and estate planning work being engaged in by lawyers, accountants and financial planners; and

3.2.3. A greater focus within families where there is an effort afoot to keep family assets within the direct family descendants of those who create wealth and assets.

3.2.4. A desire lo create some certainty for couples and avoid costly legal battles and unpleasantness at the end of a relationship .

4. Difficulties

4.1. Many lawyers cringe when they are asked to draft an agreement or advise someone in relation to a prenuptial agreement or binding financial agreement at the outset of a relationship.

4.2.1. Negotiating a pre-nuptial agreement during the Course of a period of engagement (an otherwise happy time having fallen in love with someone), forces the focus of an otherwise happy couple, towards the unhappy task of pre-determining what might happen if they separate.

4.2.2. The same gamut of emotions which are visited when an actual separation occurs often arises. Those emotions are reactive to either how mean or stingy someone is perceived as being or perhaps how demanding or how much of a digger” someone is perceived as being. Happily for lawyers, the reactions are usually less than at those extremes, but nevertheless, weddings and relationships have been abandoned as a result of difficulties in negotiating and agreement.

4.2.3. The drafting of an agreement which foresees the many variables which might arise in the future, calls for a couple to sit down and give detailed consideration to some serious issues. One of the most difficult issues is what happens when a child is born within the relationship. The custodial arrangements cannot be guessed in advance, nor can the subjective needs of the child or the parents during the chi|d’5 lifetime.

4.2.4. Many lawyers are keen to maintain their reputations and their no claim bonus insurance status and want, wherever possible to avoid damage to their reputation or a law suit for professional negligence in the event an agreement they drafted fails or is set aside, so as to no longer provide the parties with the protection it purported to offer.

4.3. For this reason, many lawyers make modified recommendations about prenuptial agreements and binding financial! agreements for new relationships.

4.4. What are they? Well they include some of the following thoughts:-

4.4.1. The best candidates for prenuptial agreements or binding financial agreements at the commencement of a new relationship are:-

4.4.1.2. Mature age couples who intend to remain childless; and

4.4.1.3. Couples, even of a young age, who are seeking an agreement for the purposes of “quarantining” only some assets, leaving the balance open for negotiation or property settlement.

4.4.2. For mature couples or second relationships, a well drafted pre-nuptial agreement will pre-determine what will happen upon separation, and, upon proper compliance with the legislation, that contractual arrangement will govern the concussion of their financial relationship.

4.4.3. For younger couples or those in their first relationship, they are often encouraged by lawyers to use agreements to “quarantine” and keep safe from claims by the other spouse, any:-

4.4.3.1. Assets they had built up before the relationship; and/or

4.4.3.2. Any gifts, inheritances or family wealth they might receive from their family or benefactors during the relationship/ in the future.

5. Problems with validity

5.1.The Family Law Act 1975 specifically says that the law of contract will apply to these agreements.

5.2. This means that for family lawyers and their clients, you must think with a commercial mind and with an eye to contractual principles when you negotiate and draft the agreement.

5.3. The legislation, the cases decided about agreements and the law of contract, tell us that, when negotiating, preparing and ultimately entering an agreements-

5.3.1. You must act reasonably and without placing duress or pressure or make threats when someone is being asked to enter an agreement;

5.3.2. You must allow a reasonable time between tabling an agreement for negotiation and an impending wedding;

5.3.3. You must not make misrepresentations or tell untruths or engage in fraudulent behaviour in the negotiation process;

5.3.4. You must properly disclose the assets which exist or which might exist – how else will someone know what they may be promising never to claim against?

5.3.5. Your agreement must comply with strict rules set out En the Family Law Act1975;

5.3.6. You must see a lawyer to get proper advice concerning the agreement as opposed to just seeing one for the purposes of having your signature on the agreement witnessed;

just seeing one for the purposes of having your signature on the agreement witnessed;

5.3.7. Your lawyer must sign a certificate and provide evidence to each party, to the effect that advice about the agreement was provided before you signed the agreement;

5.3.8. You must finally declare that your relationship has ended and each spouse must retain at least a copy of the agreement for their reference; and

5.3.9. Your agreement should not be being drafted to defeat claims by creditors or in bankruptcy.

5.4 If you have decided that an agreement is for you, whatever the reason, do yourself a favour and see an accredited specialist in family law and make sure that you have accurately and adequately prepared for a potential challenge to your agreement.

6. Estate Planning

6.1 Before closing, I might add that there has been growth in the notion that parents who have accumulated assets and wealth, might, as part of their asset, succession and estate planning, discuss with their children the entry of a binding financial agreement so as to ensure that their assets pass directly to their children, their grandchildren and great- grandchildren and never exit the hands of their direct descendants.

6.2 Parents are then deciding, depending upon whether their son and daughter-in-law or daughter and son-in-law will enter such an agreement, which quarantines any entitlement in the estate of the parents, how to deal with their assets.

6.3.1. Leaving a bequest for the child only if a binding financial agreement has been entered; or

6.3.2. Creating a trust whilst alive or a testamentary trust in lieu of a bequest, instead of passing assets to the child which might be claimed in a property settlement; or

6.3.3. Establishing a more complex Will in consultation with your Solicitor if there is no co-operation.

7. Costs

7.1. I am sometimes frustrated when l hear that people telephone a practitioner and ask what a prenuptial agreement or binding financial agreement might cost. Largely, my frustration arises because they are not easy documents and often need to be entered in consultation with clients, their parents, their accountants and their everyday solicitors.

7.2. They routinely involve negotiations; just the same as negotiations occur at the end of a relationship when deciding how to divide the assets and resources.

7.3. An agreement will take a diligent lawyer a number of hours to produce in first draft, before it is reviewed with the client and the accountant. It will take some hours to do that and a further period to engage with the lawyer acting for the other spouse to negotiate and go on to decide the final draft.

7.4. The more Complex the agreement, the greater the Cost.

7.5. In my practice, I usually see a client for a discounted initial interview, before I provide a cost estimate in writing.

7.6. Doing the best I can to estimate, in my experience, most agreements can be contained within a range of legal fees of between $3,000 and $10,000 not including GST.

8. Our Availability

8.1. My practice is a family law legal practice, so we are used to handling property settlement and maintenance matters, parenting matters, divorce, child support matters and estate planning matters.

8.2. There are five (5) family lawyers here and whilst based on the Gold Coast, we have handled matters throughout Australia and overseas.

8.3. The legal principles involved in Family Law are the same throughout the Country and with the advent of technology, a good family law legal practice can have clients in a great many places. ‘

8.4. We commonly work in tandem with accountants and other advisors to endeavour to achieve the most economic and client­specific successes possible.

If my staff and I can be of any assistance to you, enquiries can be directed- to Fiona Browne at my office (our new client officer) or by email to my address set out below.

My thanks for tuning in and reading.

Dean Evans

Evans & Company Family Lawyers

Qld Law Society Accredited Specialist – Family Law
direct email: deanevans@evansandcompany.com.au

2. In the past several years, it has come to pass in a variety of cases, that clients will inherit whether in the short or long term.

3. With the value of real property and shares having grown since our parents invested, there are often now sizeable inheritances awaiting spouses.

4. How is the Court equipped to deal with this event?

5. The typical gut reaction of a client or their wealthy parent is “how dare they!”

6. The typical reaction of a family lawyer acting for the other party who covets the inheritance of the other is, “that’s going to make a big difference in favour of
the non-inheriting spouse.”

7. Recently, the firm dealt with a prospective inheritance case where the inheritance was of several million dollars and was greater than the pool of assets available
for division between the spouses.

8. Much was made of it by the other party.

9. However, a careful consideration of the law and cases indicates that the Court has been reticent to assist a “coveting” spouse.

Discussion

10. This is a domain into which the Court has historically, and should now, tread carefully. The Courts have been reluctant to provide any great benefit to spouses by
means of making orders which provide for an immediate indirect benefit payable from the potential-beneficiary’s interest in his or her parent’s estate pre-death.

11. Her Honour Justice Moore, quite rightly described the practice as “ghoulish”.

12. Other Justices have not entered debate on the topic, but have certainly greatly limited the impact of inheritances in family law judgments so as if any adjustment
is made at all, it is minor and reflects the fact that the inheritance does not arise out of the marriage and has no real connection to

the contributions of the Wife or the Husband in the case under consideration.

13. In the case of White v. Tulloch-White (1995) 92-640, the Full Court confirmed that the instance of a likely future inheritance was certainly not to be considered
as a financial resource and further, that a likely future inheritance will not be relevant at all in many Section 79 proceedings (see page 82,463).

14. The Full Court stated:-

“The ultimate criterion is whether the evidence is, or may be, relevant to the just and equitable process under s 79. An expectancy of an inheritance will not be
relevant in many s 79 proceedings. In the end, relevance must depend upon the nature of the claims being put forward and to the facts of the particular case. For
example, if the claims were based entirely upon contributions, it could not be suggested that the issue of expectancy could be relevant because no s 75(2) factors
would be involved. Where the claim includes s 75(2) factors, the nature or degree of suggested relevance between those specific claims and the expectancy in question
would need to be analysed. That is to say, there must be a worthwhile connection between a specific element of the party’s case and the suggested expectancy.

This accords with what we understand to be the general practice at trials in this Court. That is, the initial relevance in a particular case needs to be established;
once it is it becomes a question of weight and degree. The issue is then approached by considering it in a broad, general way by taking into account the age of the
relative or other relevant testator, state of health, some general assessment of his or her financial position and some general assessment of suggested inheritance
expectancy. Detailed evidence of these matters is rarely allowed. Although that approach has a deal of imperfection about it, it is a process where the weight, if any,
to be attached to it may be difficult to identify, it is, we think, a process which is much to be preferred…”

15. The Full Court went on to say:-

“The central point of proceedings under s. 79 remains the division of the property of the parties to the marriage and thus the essential concentration should be upon
the financial circumstances of those parties. This is emphasised by the circumstance that the thrust of almost all of the matters in ss. 79 and 75(2) is to direct the
Court to consider various aspects relating to the parties themselves (or their children). As a matter of principle and day to day management of trials, it would not
ordinarily be appropriate to perform that exercise largely by detailed reference to the property of a third party or to require a third party to make a detailed
disclosure of his or her testamentary intentions and

financial circumstances. It would be highly undesirable that in a property proceeding between husband and wife significant amounts of time should be devoted to a
detailed examination of such matters.”

16. The reluctance of the Court to deal with matters such as that raised by a claimant spouse, was again demonstrated in the unreported decision of C v M, a decision
of the Honourable Justice Moore delivered on the 30th August 2000.

17. The manner in which Her Honour dealt with the issue of the prospective inheritance in the case before her was remarkable, in that she clearly showed her absolutely
begrudging reluctance to look at the prospective inheritance and take that into account.

18. After making an assessment of contribution on a 60/40 per cent basis in favour of the wife Her Honour went on to examine and take into account the matters referred
to in Section 75(2). When looking at Section 75(2)(o) Her Honour said at page 32:

“It was submitted on behalf of the husband that the wife has an expectation of inheritance from her mother in relation to a property situated in Murrumburrah. Her
mother, now aged 90 years has lost testamentary capacity, it would appear, and is cared for in a nursing home. The wife was asked to produce her mother’s last Will and
Testament and did, in fact produce a document. She is the sole beneficiary of her mother’s estate under that document, as I apprehend the situation.

In making his submissions along these lines Mr Foster relied upon the Full Court decision in De Angelis and De Angelis. This argument about prospective inheritances is
becoming a feature of matters being litigated in more recent times, no doubt as a result of this decision being given some prominence in professional writings, and
evidence is being sought to support it – particularly the production of the Will of a relative of one or other of the parties. In my experience more often than not
when it has been raised in a particular case, there has been a misunderstanding of the basis upon which De Angelis proceeded. On my reading, it is confined to a narrow
band of circumstances and is not an invitation to intrude and offend by a ghoulish pursuit of the current Will of a parent of one party, merely because that parent may
be of advanced years, or of concessions about the value of their property.”

(Emphasis added by author of this article)

19. Despite her obvious reluctance at the prospective inheritance line of argument Her Honour after citing paragraphs from De Angelis went on to say at paragraph 85 as
follows:

“85 As it happens in this case, I think the circumstances do fall within the category of case to which the Full Court was referring. I think it appropriate therefore,
to have regard in a general way to the likelihood that the wife will inherit her mother’s property in the not too distant future”.

20. Her Honour did not state what precise percentage she adjusted for this factor. But, when one considers the case, it must have been quite a minimal one. As it
happens, Her Honour adjusted in the Wife’s favour (the prospective inheritor) by 7.5% to take account of the following factors:-

a. Differential in earning capacity (Husband’s was greater);

b. Differential in superannuation holdings (Husband’s was greater);

c. The Wife had repartnered with a Mr A and financial benefits flowed to her as a result;

d. The Wife had a large prospective inheritance (comprising her 90yo infirm mother’s unencumbered property in Murwillumbah NSW).

21. Certainly, it does seem ghoulish, unjust and inequitable, that a claimant spouse seeks to claim, in effect, a share in the estate of a person not yet deceased and
to which the claimant has made no contributions.

22. The Court has continued to have tremendous difficulty in dealing with this type of matter and it appears has struggled to even offer a 5% adjustment in cases where
the inheritance reaches a magnitude of similarity to the asset pool.

23. As stated, adjustments have routinely been very small, the largest of note was 10% in the case of De Angelis (2003) FLC 93-133, which was concerned with a case
where the Husband (the spouse receiving the adjustment) had contributed to the property likely to be inherited by the Wife in a very significant manner.

24. Mr De Angelis was also unwell/unhealthy, was already 65 years of age and was supporting adult children in his home in a way the Court took into account in
determining his needs. Doing the best one can, it seems that the adjustment can be assessed as having been relatively small in circumstances where De Angelis concerned
an inheritance of roughly the same size as the pool of assets available for division.

25. However, Mr De Angelis had been making contributions to the property making up the estate so as to preserve it and, it seems on reading the Judgment, actually
assisted in having Mrs De Angelis’ aunt draw and make

the Will which bequeathed in favour of the Wife.

26. In the case of HDM and MM and SJM [2006] FAM CA 47, the reluctance of the Court was demonstrated again, this time with a second (after Moore J’s decision in C and
M (ibid)) interesting reverse consideration. In HDM, the Wife was to receive a prospective inheritance from her 88 yo mother, to the tune of $1.3 million in comparison
to an asset pool of $1.5 million.

27. Because of assistance provided by the Wife’s parents ($200,000) over the years, the Wife achieved 55% on contributions and a further 20% for Section 75(2) factors,
which included a consideration of the $1.3 million prospective inheritance.

28. It seems trite to point out that if the Wife’s Section 75(2) adjustment (in the face of a high earning Husband) was reduced at all, it was certainly not by much.

29. In the majority of cases, the claimant spouse will not be able to prove or be said to have any contributions-nexus to the prospective inheritance.

30. The majority of cases will also concern parties who have some years to live and who retain the right and capacity to change their Will in whatever manner they
consider appropriate.

31. The Court must take into account that it ought not enter into “social engineering” and seek to, developing the theme of ghoulishness, re-write Wills or order/give
effect to premature distributions from estates of the living who are third parties, not parties to the relevant marriage and unaffected (and unassisted) by
contributions made within the marriage.

32. In many cases, it is submitted that the starting point will be to suggest that absolutely no adjustment should be made on this ground.

33. If the Court is minded to make any adjustment it should be argued to be no more than 5% of the matrimonial asset pool.

Conclusion and Comment

34. If you are faced with this situation, talk to your family lawyer or talk to us about the issue. Don’t leave it be and hope for the best.

35. Parents can be encouraged to undertake some estate planning.

36. Parties can enter binding financial agreements whereby each foregoes claims to the estates or gifts which might flow from parents.

37. If at the end of the day, nothing can be done to prevent the other party raising the same before the Court, it is not the end of the World, in that despite the
protestations of the “coveting” spouse, the adjustment entitlement they can assert for is quite a minor one, particularly arising out of the ghoulish nature of the
argument and the lack of contribution to what might eventually be inherited.

38. Please consult a lawyer about your individual facts. Your subjective case has not been considered in the writing of this article and you should not rely upon
general articles in your case unless legal advice to the same effect has been obtained by you.

Dean Evans, Evans & Company Family Lawyers