Many parents are considering ways that they financially assist their adult children but also ensure that they and their child are protected from a divorce of the child and his or her spouse. Unfortunately there is no one solution to this objective but thorough legal and financial planning can minimise the potential for claims and conflict in the event of the breakdown of a marriage or relationship. Further, you can ensure that your assets benefit who you intend.

Chief considerations are: ensuring loans from parent to child do not infringe the “presumption of advancement” that exists between a parent and child; planning for the passing of control of family companies and trusts; and estate planning by a parent including through the use of testamentary trusts.

People intending to marry or live in a de facto relationship can seek to arrange their finances in an agreed way in the event of the breakdown of their relationship. Popularly referred to as “pre nuptial” agreements these documents are, legally speaking, called Binding Financial Agreements being a form of contract under the Family Law Act. It is a requirement of a Binding Financial Agreement before marriage or a de facto relationship that each person obtain independent legal advice in writing.

Gordon & Barry Lawyers Pty Ltd does not advise on Binding Financial Agreements before marriage or commencement of a de facto relationship. Why? Simply put, they can make your legal situation worse and more costly. The law is highly uncertain regarding Binding Financial Agreements before marriage or commencement of a de facto relationship and therefore such Agreements have the potential to make the legal consequences of the breakdown of a relationship more complex and expensive as opposed to less complex and more affordable. We have acted on the setting aside of “pre nuptial” Binding Financial Agreements and we know that the legal protection (if any) afforded by such an Agreement can be limited or non-existent. Finally, the life events that will inevitably unfold over the course of a marriage or de facto relationship are inherently unpredictable and the ability of the law to address such complexity in a cost effective manner is limited. According, the “disclaimers” we would provide to you in our letter of advice in respect of a Binding Financial Agreement in contemplation of marriage or a de facto relationship would be so wide that we do not regard it as ethical to take your money for advice on such Agreements.

People intending to marry or live in a de facto relationship can take practical steps to collect information and/or arrange their finances in a way that seeks to minimise any dispute that may arise in the event of the breakdown of their relationship. Understanding the family law implications of financial and lifestyle choices can enable prudent planning to occur. We have conducted family law planning sessions with one person to a relationship and we have also advised both people contemplating the relationship in order that they can hear the advice together and then have informed discussions with each other as to the decisions they wish to make.