A Binding Financial Agreement is a necessity not a choice - A stark difference between family law in Australia and India with respect to division of property between a couple on separation or divorce
Family law in Australia is in stark contrast to family law in India as a result of law based on personal laws in India and not on common law. For example, in India, a Hindu wife and husband could own their properties separately throughout the marital relationship, including separation or divorce. Particularly, Section 14 of the Hindu Succession Act 1956 clearly codifies that property of a female Hindu is her absolute property, including both movable and immovable property. The only liability which could arise on separation in India, in relation to Hindu couple, is maintenance.
At common law, once married, a husband and a wife become one entity and so do their properties; termed as a property pool/matrimonial asset pool. Unfortunately, even inheritance and gifts are not protected assets. On separation and divorce, the Courts in Australia, for the division of properties, treat each case differently depending upon the circumstances of the parties such as each party’s financial contributions to the relationship, duties of each party, and the ongoing and future financial needs of each party. Though the proportion in which the division of asset pool would be made depends on many factors such as timing of inheritance/asset received/earned before, during or after the relationship/marriage; whether the asset was being used jointly during the relationship/marriage or it was kept separate; size of inheritance/assets; in case of will or gift, the intention of the testator or benefactor; any contribution of the other partner towards the asset to enhance its value or convert it into something of use, for example, an old apartment renovated using partner’s funds for renting purpose.
Entering into a binding financial agreement with your partner before marriage or even during marriage is the best option to prevent your assets from being considered a part of the matrimonial asset pool. For a binding financial agreement to be legally binding, it is essential to have consent of the other partner and that the partner must have received an independent legal advice from a lawyer. Though a binding financial agreement may or may not stand its test in a Court but it is always better if a professional lawyer has drafted it so as to make sure that each factor is taken care.
If you or someone you know wish to discuss this issue further, then please do not hesitate to contact us on 02 8999 9809.