By Caroline Counsel from Counsel Family Lawyers Better Families Brighter Futures

1. “He’s never going to leave
me….” and other myths
Caroline Counsel
Counsel Family Lawyers
Better Families Brighter Futures

2. How does love go from this:

3. To this?

4. Even swans aren’t swans….

5. Fact 1: Not All Marriages Last!
 Divorce rate – ever increasing: varies but approx 50%
 Higher for second relationships/marriages
 Couples have different assets/liabilities at start
 Couples have different financial profiles/risk profiles
 Couples divide labour without a financial roadmap of
termination in mind
 But may make pragmatic choices

6. Fact 2: Many Marriages Don’t Last Long

7. Fact 2: Many Marriages Don’t Last Long
 Median duration from marriage to divorce in 2014 was 12 years (in
2004 it was 12.3)
 Median duration from marriage to separation in 2014 was 8.4 years (in
2004 it was 8.7)
 Number of divorced Australians compared with 10 years ago
 2.0 divorces per 1,000 estimated resident population in 2014.
 Since 1980, divorce rates have steadily declined from 2.7 in 1980, to 2.0 in 2014
(backlog post FLA cleared)
 In 2014, 47% of all divorces involved children under 18

8. SOME STATISTICS TO NOTE:
 Age period highest divorce rate in:
 Men – median age – 44.8 (in 2013) – Highest period = 25-29
years (18.2 per 1,000 married population) (2013 data)
 Women – median age - 42.2 (in 2013) - Highest period =
under 25 (20.8 per 1,000 married population) (2013 data)
 Divorce Rate + for second relationships
 Difficult to find, 2007 ABS analysis of concluded that of all
marriages entered into in 2000-2002, 33% would end in
divorce.
 Sydney Morning Herald reporting as 60% for second
marriages

9. Fact No 3: Many reasons for breakdown

10. More reasons:

11. And sadly and significantly:

12. Fact 4: Significant financial consequences
 We don’t assess where relationships are going –
romantically, emotionally or financially
 We don’t know the risks and exposure
 Separation - unilateral decision – no control
 Separation -biggest single threat to personal and
business wealth base
 De facto relationships do not escape financial
consequences

13. Fact 4:Cont’d
 Family Law Act: Broad definition of assets
 There is no “mine” or “his”
 Court decides how to regard legal ownership or financial
contribution
 Superannuation = Property
 Court has a broad discretion- sell, divide, ignoring
preferences
 Court can order maintenance: lump sum: from assets
 Other party can acquire an interest for no direct financial
effort

14. Emerging and unimagined consequences

15. Fact 5: Not all loans are loans
 Due to house prices, couples rely on parents
 Parents loan/gift money
 Loan may be considered a gift by the Family Court
 In short, Court decides how to regard parents
contributions
 Court can ignore written agreements between parents and
adult children
 Can have a Financial Agreement between couple and third
parties ie parents

16. Fact 6: Court delays and legal costs
 Litigation is expensive
 Family Courts are unpopular
 If Pauline Hanson is listened to, no Courts and if
Federal Govt believes Family Courts are a hot
potato
 Then even less money for Courts, longer delays,
more frustration for clients, justice denied

17. Benefits of a Financial Agreement
 Can avoid Court
 Can assist reduce legal costs
 Can minimise dispute after separation
 Can’t avoid division of the asset pool so may as
well limit fall out
 Curtails the angst during relationship if it’s well
drafted as a “set and forget” agreement
 Can protect “parent loans” if parties to F.A.

18. Benefits of a Financial Agreement
 A Financial Agreement can close the door of Court
 Financial Agreement = a fraction of the cost of
Court dispute
 A Financial Agreement at the start can assist a
couple, particularly second relationship, focus
 Can provide for children of first marriages- estate
planning

19. Benefits of a Financial Agreement
 Will help clients assess goals,
 May help highlight financial incompatibility
 Can lead to getting financial planning advice
 Can lead to greater financial scrutiny as a couple

20. FINANCIAL AGREEMENTS – WHEN?
 Financial Agreement - quarantine
business/personal assets from the beginning
 Clients can enter into before/during marriage –
after separation or after divorce
 If prior must enter well before wedding day
 Advisable to negotiate post separation if close to
that date
 Cannot be used to defeat creditors – cannot be a
fraud on a creditor

21. FINANCIAL AGREEMENTS – WHY?
 If clients have assets of any significance
 Financial Agreement: excludes
property/maintenance sections of FLA
 Assets acquired during marriage can be dealt with
ahead of time – eliminates angst of “what if…”
 Court orders only deal with property – cannot
finalise maintenance
 A Financial Agreement can shut the door of Court

22. FINANCIAL AGREEMENTS
 Pre determines who gets what on separation
 Can be used as part of a suite of estate planning
documents
 Can agree as to what happens to inheritances and gifts
 Can deal with who gets what re superannuation
 Is the client better off under the Family Law Act?
 Need to assess what rights the client is giving up before
entering into a Financial Agreement

23. Benefits of Financial Agreements
 Court = uncertain outcomes
 Financial Agreements = eliminate uncertainty
 BUT how do you say “I love you…now sign here” – a whole
other discussion