THE proposed Federal law relating to pre-marital financial agreements has huge implications for financial advisers and accountants.
The proposed law will enable couples, before, during or after marriage, to make binding financial agreements in relation to property and maintenance.
Under present law “pre-nuptial” agreements hold little weight. The new law will make such contracts binding. The new law stipulates couples must seek legal advice before signing and financial advisers must understand the logistics surrounding the amendments.
Jackson McDonald family law partner Rick O’Brien said the legislation gave new financial planning options.
“People providing financial advice need to understand those options and appreciate that the legal requirements to take advantage of them are detailed and onerous,” Mr O’Brien said.
One major proposed amendment to the Family Law Act relates to superannuation. In the past a super fund could not be divided between parties in a settlement. The new legislation will enable it to be split.
“Superannuation has presented difficulties in marriage settlement issues in the past,” Mr O’Brien said.
“With compulsory superannua-tion contributions in place, the fund often represents a large portion of a family’s net resources.
“Currently, superannuation can-not be divided, which can leave one party with limited current assets and the other with limited long-term security.”
The legislation adds options for the resolution of disputes associated with marriage break-down, but will not resolve all disputes where superannuation is an issue.
In some cases, where there are factors such as children involved, the splitting of superannuation and the other assets such as the family home may be inappro-priate.
Advisers will need to come to terms with the complexity of these issues when advising clients.
Jackson McDonald will hold a series of seminars about the changes.
