Protecting Your Assets Before a Relationship
Prenuptial agreements are legally recognised in Australia under the Family Law Act 1975, and are an increasingly common way for couples to agree in advance on how property and finances would be handled if the relationship ends. Rather than assuming the best, agreeing on this early can save considerable time, cost, and conflict later. For an agreement to be binding, each party must receive independent legal advice before signing.
Beyond a formal agreement, there are practical steps that can help protect what you bring into a relationship. The right combination depends on your circumstances, and some steps carry side effects such as tax implications, so it is worth getting legal and accounting advice before acting on any of them.
- Keep your finances separate where possible, including maintaining your own bank accounts.
- Contribute to household expenses in clearly agreed, proportionate shares.
- Avoid having your partner work unpaid in your business; pay a proper wage if they do.
- Think carefully about how you hold real estate, whether solely, jointly, or through a company or trust.
- Keep clear records of financial transactions throughout the relationship.
- Keep assets you owned before the relationship in your own name, and avoid rolling them into jointly held property without keeping records of your contribution.
- Keep lump sums received during the relationship in your own name rather than placing them into joint assets.
- Document any significant gifts or loans from family at the time you receive them.
- Avoid taking on your partner’s debts, whether through joint loans, guarantees, or business partnerships.
- Make a will that sets out what happens to your property if you die.
- Review who you have nominated as the beneficiary of your insurance and superannuation.
These steps will not prevent a claim on assets brought into a relationship, but they make it far easier to demonstrate your contributions if the relationship ends.
7 Mistakes to Avoid During Separation and Divorce
Some of the most costly mistakes in separation happen in the first few weeks, often before independent legal advice has been sought. These are the ones that come up most often.
- Relying on advice from friends and family. The people around you are a valuable source of emotional support, but every situation is legally unique, and advice based on someone else’s experience is rarely the right fit for yours.
- Moving too fast or waiting too long. Timing matters. Understand your rights and entitlements before deciding when to separate.
- Being unprepared. Gather your financial information early, including tax returns, superannuation statements, pay slips, and property contracts, so you are ready when it counts.
- Going to court too soon. Litigation is rarely the first or only option, and most matters can be resolved without it.
- Going to court too late. In situations involving risk to children or assets being disposed of without consent, swift action matters, and delay can cost you.
- Expecting too much, or giving away too little. Understanding your entitlements early means you can negotiate realistically, rather than compromising out of uncertainty.
- Reaching agreements without legal advice or properly drafted documents. Agreements and court orders both need to meet specific legal requirements to be enforceable, and cutting corners here tends to cost more in the long run.
False Family Violence Allegations and Why They Backfire
Family violence should never be condoned, and the legal definition is broad. It includes physical abuse, emotional abuse, financial control, isolation from friends and family, threats against you or your loved ones, intimidation, and name-calling or put-downs.
Making a knowingly false allegation of family violence, for example to gain a tactical advantage or to limit a partner’s relationship with their children, carries consequences that are easy to underestimate at the time. Allegations of this kind often mean mediation is no longer appropriate, pushing the matter into court and adding cost and delay. The court may also appoint an independent children’s lawyer, introducing a third party who does not know either parent into decisions about the children.
Beyond the legal consequences, it is worth considering the longer-term picture. Children grow up, and a false allegation made in the heat of separation is not something that simply disappears once the case concludes.
The Danger of Social Media and Angry Messages
Never send a message, whether by text, email, or social media, while angry, affected by alcohol or drugs, or jealous. Anything written in that state can end up as an exhibit in an affidavit, and deleting it afterwards does not make it disappear. Once a message is sent, it exists permanently and can be used in court.
If you are feeling angry or upset, write your thoughts down privately, or speak to your lawyer or a counsellor, rather than sending them to your former partner. Before sending anything, pause and consider how it would read if a judge saw it. Keep communication civil, brief, and focused only on what is necessary, particularly where children are involved.
Different parenting styles are normal, so avoid using messages to criticise how your former partner is raising your children. Threatening, intimidating, or offensive messages, even sent electronically, can constitute family violence and may result in an intervention order being taken out against you, which complicates the matter and can affect your time with your children.
Red Flags During Property Settlement
Separation can bring out tactics from a former partner that are worth recognising early, since each carries real financial or parenting consequences if left unaddressed.
An unexplained spending spree
If your former partner appears to be spending heavily, on holidays, clothing, or a new car, while you are concerned there will be little left to divide, act quickly and keep your legal adviser informed. Properly documented and presented to the court, that spending can be treated as an early, partial property settlement in your former partner’s favour when the final settlement is calculated.
The “50/50 is fair” pressure
It is a common myth, reinforced by film and television, that property is always divided equally. Every case is different, and a 50/50 outcome is not automatic. Be cautious if a former partner is pushing you toward this outcome, particularly if you are the primary carer, working part-time, hold less superannuation, or have taken time out of the workforce for children. Do not agree to any settlement without independent legal advice, and only once your adviser has the full financial picture.
Pressure to agree to shared care
Some people agree to shared care arrangements out of guilt about ending the relationship, rather than because it suits the children. It is worth getting advice on what arrangement a court is likely to consider before agreeing to anything, since a primary carer’s reduced working hours and income are usually reflected in the final property split. Do not agree to a parenting arrangement, or attend mediation, without legal advice first, and do not feel obliged to agree to anything you are not comfortable with during that process.
Hidden income through a family business
If you or your former partner run a small business, watch for income being minimised through a family trust or company, or benefits such as a vehicle or subsidised expenses being taken instead of salary. New employees, particularly family members, can sometimes be used to divert income away from the business ahead of a property settlement. A fresh review of company records can help identify what is a normal transaction and what is not.
Understanding the Financial Statement and Its Addendum
It is not unusual to feel financially restricted by a former partner during separation. Regardless of whether your matter is resolved amicably or through litigation, properly completing a financial statement and its addendum is one of the most valuable steps you can take.
Together, they set out your current financial position and your immediate, short-term, and long-term financial needs, and form the basis for advice about property entitlements, spousal maintenance, and other entitlements under the Family Law Act.
Gathering Your Financial Documents: A Checklist
If you are the one considering separation, you have likely had time to think it through. If you have not yet told your partner, it is worth understanding your financial position before you do. If your partner has raised it first, be aware they may already have a head start. Gather the following documents, and your partner’s where you can access them, as soon as possible.
- Your three most recent tax returns and notices of assessment
- Details of all income, including rental income and income from shares or other investments, for both yourself and your partner
- Bank statements for the past 24 months, for all accounts held jointly or solely, including any held through a trust, company, or partnership
- Loan statements or mortgagee letters for the past 2 years
- Credit card statements and evidence of other debts for the past 2 years
- Details of current liabilities
- Up-to-date superannuation statements
- Details of life insurance policies
- Any family or other trust deed, with the last three financial statements
- Company annual returns of directors and shareholders
- Any partnership deed, with the last three financial statements
- Business activity statements for the past 24 months
- Market appraisals or valuations of real estate or other property
- Settlement statements for any property sold in the 12 months before separation
- Contracts of sale or purchase and associated settlement statements
- Details of shares held solely or jointly
- Details of other investments held solely or jointly
- Details of other significant assets, such as vehicles, equipment, or jewellery, with valuations where possible
- Any correspondence from Centrelink or the Child Support Agency
- Any notices relating to bankruptcy or credit action
- Details of any workers compensation or personal injury claims, payments, or anticipated payments
- Copies of any will, grant of probate, or anticipated inheritance
- Any other financial documents relating to your partner’s income, superannuation, or assets
If you are ever unsure whether a document is relevant, the safest approach is to gather it anyway.
Updating Your Estate Plan After Separation
A change in your relationship status, whether that is moving in with someone, ending a de facto relationship, marrying, separating, or divorcing, is a reason to revisit your estate planning documents. It is common for a former partner to still be listed as executor or trustee of an estate, or as the nominated beneficiary of a superannuation policy and its linked life insurance, long after the relationship has ended.
When reviewing who to appoint as executor or trustee of your estate, it helps to have fixed-price estate planning advice available, so updating these documents does not become another source of uncertainty during an already difficult time.
Choosing the Right Executor for Your Will
An executor is the person or trustee company responsible for managing your estate after you die. Your will names your executor and gives them authority to act in line with your instructions. They cannot deviate from your will, even if they believe your wishes may have changed, and can be required to explain themselves to the court or the Registrar of Probates if they fail to act.
An executor can be a family member, friend, lawyer, or another professional such as an accountant or trustee company. The right choice depends on their circumstances and skills, not simply how close they are to you.
- They need the time, skills, and willingness to take on the role. Ask them directly before naming them.
- You need to trust them to carry out your wishes and manage disputes between beneficiaries fairly.
- They should be comfortable with basic accounting and dealing with banks, lawyers, and family members.
- Avoid choosing someone significantly older than you, in poor health, or likely to move overseas, particularly if your children will not benefit from the estate for some years.
- If you appoint a professional executor, they will need to be paid from the estate, and your will should specify how.
- An executor can seek professional assistance if needed, with any associated costs paid from the estate before assets are distributed.
Frequently Asked Questions
1. Do I need a lawyer to separate in Australia?
No, but getting legal advice early, before signing anything or reaching an agreement, generally leads to a better and faster outcome than resolving matters informally and correcting mistakes later.
2. Is property always split 50/50 in a divorce?
No. Every case is assessed individually, based on contributions, future needs, and other factors, so a 50/50 outcome is not automatic or guaranteed.
3. What happens if I make a false family violence allegation?
Beyond the ethical issues, false allegations can prevent mediation, push a matter into court, add cost, and lead to an independent children’s lawyer being appointed. It can also affect your relationship with your children long after the case concludes.
4. Do I need a prenuptial agreement?
Not everyone does, but a prenuptial agreement can provide certainty about property and finances if a relationship ends, and is increasingly common among couples who want to avoid disputes later. To be binding, both parties need independent legal advice before signing.
5. What is a financial statement in a family law matter?
It is a document that sets out your financial position, including assets, income, and liabilities, along with your financial needs. It forms the basis for advice about property settlement, spousal maintenance, and other entitlements.
6. Why do I need to update my will after separation?
Without an update, a former partner may remain listed as your executor or as the beneficiary of your superannuation and life insurance, which is rarely what people intend once a relationship has ended.
Get Advice Tailored to Your Situation
Every separation is different, and general guidance can only take you so far. If you would like advice specific to your circumstances, get in touch for a fixed-fee consultation, delivered online, wherever you are in Australia or overseas.
