What is a Prenup?(Prenuptial Agreement)
April, 2016
By Matthew Carney
Family Lawyer
Legal Disclaimer
This presentation is offered for general information
purposes only. It does not constitute specific legal
advice or opinion. You should not act or rely upon any
of the information contained within this seminar
without seeking the advice of a qualified solicitor who
specialises in the particular area of expertise and
jurisdiction that you require.
Introduction
Nobody gets married with a view to getting divorced
later in life.
As such, the benefits of prenups are easily
dismissed in the lead up to a marriage.
There is an old saying that is applicable here:
"Nobody plans to fail, but many fail to plan"
Introduction
Putting a prenup in place is
simply risk management, for
your life.
Prenups are a safety
precaution that becomes
even more relevant when
you consider that every third
marriage in Australia ends
in divorce (ABS).
What is a Prenuptial Agreement? (Prenup)
In Australia, a prenuptial agreement is referred by
the Family Law Act as a Binding Financial
Agreement (BFA).
A prenup is a legally binding financial agreement
between two people who are meaning to get
married (a similar agreement can be prepared if
two people are planning to live together in a de
facto relationship).
What is a Prenuptial Agreement? (Prenup)
A prenup records
what assets and debts each
person brings into the
relationship and states what
will happen in the event that
the relationship breaks
down (separation or
divorce), and how the
couple's finances will be
divided.
What makes Prenuptial Agreement
legally binding in Australia?
1. Prenups must comply with strict legal guidelines
as outlined in the Family Law Act (1975).
2. They must be in writing.
3. Each person must have received independent
legal advice before signing the prenup.
Continued...
What makes Prenuptial Agreement
legally binding in Australia?
4. The legal advice provided must have come from
a lawyer in the Australian jurisdiction.
5. Each person must have signed the prenup
voluntarily (free from coercion, duress or undue
influence). This means one person cannot tell
the other that they will not marry them unless
they sign a prenup.
6. The prenup should contain a complete
disclosure of each person's financial standing.
What are the benefits of Prenuptial
Agreements?
1. Facilitate Separation or Divorce - Prenups facilitate a swift and smooth separation or divorce by preventing contentious disagreements.
2. Minimise Costs - Separations and divorces can be quite costly, especially when one or both parties has a high financial standing and the relationship has ended on bad terms. The cost of a separation or divorce rises with contentiousness. A prenup will significantly reduce the associated costs.
Continued...
What are the benefits of Prenuptial
Agreements?
3. Minimise Acrimony - Prenups often work to reduce acrimony between the two people involved. Prenups have the potential to allow both parties to end the relationship amicably, on better terms.
4. Protection - Prenups provide protection of valuable assets, including premarital property, family heirlooms and businesses owned.
Continued...
What are the benefits of Prenuptial
Agreements?
5. Clarity & Certainty - A prenup provides both parties with complete clarity and certainty on the events that will unfold should the relationship breakdown. This means less confusion when it comes to making decisions about the future of the relationship.
Continued...
What are the benefits of Prenuptial
Agreements?
6. Strengthen Relationship - Prenups have actually been shown to strengthen current relationships and make separation and divorce less likely. This occurs because a prenup forces the couple to have important discussions about their future, providing both parties with a clear understanding of the other's intentions and thus increasing the chance of a successful and peaceful marriage.
Are Prenuptial Agreements always
enforceable?
No. For a number of reasons prenups are often overturned by the Court.
Common reasons of agreements can overturned are:
1. Children - If an agreement does not provide for circumstances relevant to future children, it may be set aside.
Continued...
Are Prenuptial Agreements always
enforceable?
2. Non-disclosure - If a party does not disclose the full extent and value of their assets at the time when the prenup was drafted and signed it may be set aside.
3. Unreasonable Pressure - If a party unreasonably pressures or coerces the other party into signing the agreement it may be set aside.
Continued...
Are Prenuptial Agreements always
enforceable?
5. Last Minute Decision - If a party requires the other to sign the agreement shortly before the wedding as a condition of the wedding continuing it may be set aside.
6. Unfairness - If an agreement is not just and equitable (fair) it may be set aside.
When is a Prenuptial Agreement a good
idea?
Due to the degree of uncertainty associated with the enforceability of prenups, we will only recommend a prenuptial agreement in limited situations.
To discuss if a binding financial agreement is right for you please contact our firm.
Turnbull Hill Lawyers – Contact Us
If you have any further questions about prenups or
you'd like to discuss a related matter, please call:
Matthew Carney on 1800 994 279 or email him.
We will endeavour to respond to your enquiry
within 24 hours.
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