The wedding papers you sign on your wedding day are probably the most important and binding legal document you will sign in your life.
The marriage contract is a legal commitment that each partner makes to the other that is defined, regulated and enforced by law.
Marriage in Australia is defined by the Marriage Act 1961, s5(1): “Marriage, means the union of a man and a woman to the exclusion of all others, voluntarily entered into for life.”
By entering into marriage the couple promise that they will respect, care and support each other and any children of the union. The marriage contract also covers provisions regarding property rights, custody rights and impacts on inheritance rights. For example, the Family Law Act allows claims even over future income … account is taken of a likelihood of a change in the financial situation of either party in the future by reason of superannuation payments, finishing a degree and so on.
The husband provided the only income and the wife cared for the home and children. Division of property and issues of maintenance reflect this common arrangement.
A recent estimate of the earnings that a woman forgoes as the result of taking on the role of home maker and caring for children amounts to 28 per cent of her lifetime earnings or $200,000 for the birth of one child. In marriages where basic assets comprise close to the entirety of the couples’ asset wealth, most property is split 50/50. However where there are more than basic assets, a woman’s non-financial contributions, particularly in terms of child-rearing, means that she may well end up with more than half the property, especially if she has the care of children under 18.
It is important to remember that debts are treated just like assets. It is possible that husbands and wives can incur debts in each other’s names especially if there are family businesses.
Australian family law differs from the law in other countries- there are no automatic property rights for each spouse. Whilst a spouse usually has the right to share ownership of property acquired during marriage, with the expectation that the property will be divided between the spouses in the event of a divorce or at death, non-financial contributions of the parties are taken into account.
Of course, these days it is more common that both partners will work and bring income into the union. Perhaps the wife will bring in income whilst the husband cares for the children.
Each partner may have existing assets, children or debts.
These new arrangements and circumstances in the modern marriage need to be considered when entering the marriage contract. If the traditional methods of dealing with assets, maintenance and children do not suit your personal situation then you should consider implementing a financial agreement under the Family Law Act. This financial agreement will in most cases let you decide for yourselves how your property should be handled.
If there is a financial agreement, the role of the court in any separation process is simple and administrative: It declares the ending of the relationship, allocates property according to the financial agreement, and takes into account the needs of children when making an allocation of custody and access rights. Then people can get on with their lives with the past behind them. The old relationship is dead and they can begin anew, re-partner, and build a new family life.