Pre-nuptial agreements have always been a taboo topic for couples looking to marry. After all, if you’re already discussing the failure of your marriage prior to exchanging your “I Do’s”, then what is the point? Still, if both or either of you have financial assets you want to protect, it’s perfectly acceptable to consider getting a pre-nuptial agreement before walking down the aisle.
What is a pre-nuptial agreement?
A pre-nuptial agreement (prenup) is a legally binding contract that lays out how a couple will manage the financial aspects—property, spousal maintenance, and debt—of their marriage. In the event of a divorce, the prenup dictates the property and financial rights of each party. Before you get married, a prenup allows you to come into a mutual understanding of how you want your assets to be distributed between the two of you.
Is a pre-nuptial agreement enforceable in Australia?
Long story short: yes, it is enforceable in Australia.
A pre-nuptial agreement in Australia is under section 90B of the Family Law Act 1975. It’s legally referred to as a “financial agreement.” The court has the final say whether to enforce it or set it aside, but as long as both parties comply with the requirements in the provision, then the financial agreement can be carried out.
Pros and cons of a pre-nuptial agreement
- You and your partner can come to terms with a mutual agreement of how you will handle financial matters like net assets and resources should you separate in the future, therefore dodging any avoidable battles over finances when it happens. It should be noted that a prenup does not, in any shape or form, imply that a couple is anticipating a divorce.
- Since the agreement clearly outlines how assets will be divided, it cannot be altered or negated by the Family Court. Any potential dispute must already be solved by the prenup itself.
- If you have children from a previous marriage, their financial well-being will be protected by the agreement.
- Any personal or business asset either party accumulates prior to the marriage is protected.
- A prenup forces you to be completely transparent about your finances. You will have to reveal credit scores, debt, spending behaviour, and more. Doing so will actually help you avoid any financial roadblock in the middle of the marriage since everything is already laid out beforehand.
- There’s a stigma associated with prenups, as many see it as a way to “plan the divorce” before even doing any sort of preparations for the wedding.
- A prenup can cause friction and resentment in a relationship. After all, there’s nothing romantic about putting financial matters out in the open. Each or both parties may feel that the other doesn’t trust them.
- A prenup can be rendered null when the other party fails to disclose all of their assets or if it’s proven that they engaged in fraud or coercion at the signing of the agreement.
Should you have a prenup agreement?
There is no right or wrong answer to whether or not you should get a prenup. In the end, it all comes down to the needs of you and your spouse. If you have a significant amount of assets, however, you may want to think about it as doing so will protect your belongings in the worst-case scenario.
Should you need any legal assistance, get in touch with our lawyers in Balmain today.
This article is intended to provide general information. You should obtain professional advice before you undertake any course of action.