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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