Getting a Prenuptial Agreement in Australia
A prenuptial agreement in Australia is a financial agreement under the Family Law Act 1975. A prenuptial agreement allows you and your fiancé, or soon to be spouse the ability to determine what will happen to the property and assets in your relationship should you separate after you marry. Separation and the ensuing division of property is a major factor that can affect your wealth in your lifetime. Property settlement Court battles can substantially reduce your wealth, tie up property and assets, take years to resolve, and bring stress and emotional turmoil that often comes with going to Court. Given the risks associated with separation and the loss of wealth, our clients wisely choose our family lawyers to protect them when getting a prenuptial agreement in Australia.
Benefits of a Prenuptial Agreement
Often prenuptial agreements are seen as unpopular, unromantic, controlling or representing a lack of trust between the parties. In reality, this is not the case. A prenuptial agreement is a voluntarily agreement where the parties are fully informed of their rights without pressure or deception. Rest assured, that an agreement made under duress or through false information is not a binding agreement, and the Courts will not honour that agreement. A prenuptial agreement is an open and honest agreement with your partner that considers the wishes of both parties in the event of separation. A prenuptial agreement can preserve wealth and help the parties avoid an unnecessary property settlement court battle. We think of a prenuptial agreement as analogous to a lifejacket. No one wants to be in a situation where you must use a lifejacket, but you are grateful to have one if the circumstances call for it. We tell our clients that in most instances, a prenuptial agreement pays for itself. The agreement often prevents the cost of court battles which can range from tens of thousands of dollars to hundreds of thousands of dollars, dramatically reducing the money available to the parties.
A prenuptial agreement allows both parties to consider their financial position coming into the marriage, their contributions to the marriage and to consider what should happen if they separate. While this can seem scary at first, the reality of the laws around financial agreements in Australia are that a financial agreement must be fair and equitable. This means that the parties cannot take advantage of one another with a grossly unfair prenuptial agreement because the agreement would be unenforceable.
That’s also why it’s important to speak to one of our family lawyers to get your prenuptial agreement right. We will guide you through the complex rules and requirements of prenuptial agreements and provide you with straightforward written legal advice for your future reference.
Why Smart People Enter into Prenuptial Agreements
A prenuptial agreement can be empowering to the parties entering it. This is because the parties need to consider their current financial circumstances, what contributions they are bringing into the marriage, what contributions they are likely to make during the marriage and how their financial circumstances are likely to change in the future. Considering these matters is akin to planning for your future and also serves as a record of each party’s contributions. With our lawyers guiding you through the prenuptial agreement process, you will consider your future and make provisions for it, rather than finding yourself being unprepared and a victim of circumstances.
An agreement about financial matters before a marriage can help the parties plan their future together and ensure that each other’s expectations are considered. Financial difficulties, mismatch of financial expectations and poor consideration of financial circumstances often place great financial stress on a marriage and can be a precursor to separation. That’s why we see prenuptial agreements as a smart way to help a marriage have a strong foundation for a successful future, by encouraging open dialog. We encourage our clients to think of a prenuptial agreement as a method of joint planning allowing the parties to consider each other’s future needs in the event of separation.
If the parties separate, both spouses will be confident in what is going to happen and can be empowered to move forward with their respective life. This reduces uncertainty and the turmoil that we often see during property settlement after separation. Spouses embroiled in property settlement negotiations and court proceedings can take years before everything is resolved. In many cases, spouses who have a prenuptial agreement resolve property settlement between them quickly and with less hardship.
Why Prenuptial Agreements Must be Fair
A prenuptial agreement must be entered into voluntarily by both parties and comply with the laws governing financial agreements in order to be valid and enforceable. These rules include that both parties must have independent legal advice. The lawyer for each party must sign a certificate of independent legal advice which is included in the financial agreement.
A prenuptial agreement can:
- Provide protection to assets and property brought into the relationship
- Provide protection to assets and property accumulated during the relationship
- Provide for spousal maintenance
- Consider the foreseeable future needs of both parties
- Help align mutual expectations
Prenuptial agreements must be fair and equitable in all the circumstances. This means the parties must be fair about the arrangements the prenuptial agreement makes. An unfair prenuptial agreement can be challenged and could be unenforceable. That’s why our family law lawyers guide you through the complex laws that govern what is fair and what is not fair.
What is fair and not fair is a question of law. The concept of fairness applies to the circumstances of the parties, the prenuptial agreement generally and to the different areas that can be dealt with in the agreement.
Factors considered include:
- The age, health and education of the parties
- Known future needs
- Duration of the protections in the prenuptial agreement
- The protections provided for assets brought into the relationship
- The income created during the relationship
- The protections provided for the assets accumulated during the relationship
- Arrangements around spousal maintenance and future events such as having children.
Plan for the Future
Prenuptial agreements are a great way to be smart and plan for the future. The parties entering a prenuptial agreement can align their financial expectations, consider each other’s financial position and be fair about what should happen in the future if they separate. In the event of separation, both parties will have greater certainty about what is going to happen and will likely avoid an expensive and time-consuming property settlement court battle.
With the help of our family law lawyers, we will:
- Provide you with written advice about your prenuptial agreement for your future reference
- Review your personal circumstances and those of your fiancé and provide you with legal advice about creating a fair and enforceable prenuptial agreement
- Negotiate, draft and execute your prenuptial agreement.
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