Prenups: Get A Binding Financial Agreement In Australia

Long ago, having a prenuptial agreement was considered excessively formal, or insulting, however ‘prenups’ are becoming more common.

Many relationships break down. About 40% of marriages end in divorce, and de facto relationships are no better. If that happens, binding financial agreements can save couples time, money and headaches deciding who gets what when going through the Family Law Court.

Do you want more clarity and certainty in your relationship? If so, then a prenup is of huge benefit to you and your spouse.

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Your Family Law Guide To Prenuptial Agreements In Australia

What Is A Prenup?

A prenuptial agreement, also known as a premarital agreement, prenup, or prenupt, is a contract recognised in Australia by the Family Law Act 1975 that you and your partner enter into.

Technically called a Binding Financial Agreement, the contract covers what will happen if the relationship breaks down either by separation or divorce. It is created to protect the assets of each individual, and division of shared finances and property.

Whether it is a marriage or a de facto relationship, binding financial agreements can be made before, during or after the relationship.

In order to get an agreement, you must have a certificate stating you have received proper advice from a family lawyer, and that the prenup complies with strict family law legal requirements. If the agreement has not been done in accordance with legal requirements it will not be upheld and you will likely have to resolve things in the Family Law Court.

Marriage Prenuptial Agreement

What Can Binding Financial Agreements Cover?

The content of prenuptial agreements can vary widely, however, many things that a prenup can cover in the event of a divorce or separation include:

  • Division of property and finances.
  • Spousal support.
  • Terms for the forfeiture of assets as a result of divorce on the grounds of adultery.
  • Cash.
  • Real Estate.
  • Super Annuation
  • Investments.
  • Businesses.
  • Inheritances.
  • Pension Entitlements.
  • An Outline of any obligation to finalise debts and liabilities of the relationships.
  • All future aspects such as children and future asset purchases.

Each contract is different. You should consult a lawyer regarding specific terms you would like included in the contract.

Prenuptial Agreement Sydney

Should You Get A Prenup Agreement?

A prenup can be made by couples before they enter into a marriage. It outlines how the financial assets should be distributed if the relationship breaks down. A marriage contract is a safety precaution that can make a settlement in a divorce less complicated.

Prenuptial Agreements may be appropriate where:

  • One partner has significantly more assets than their spouse.
  • One person is, or may later become, entitled to an inheritance or gift.
  • It is a de facto relationship and one person is moving into the other person’s property.
  • You are moving into a second relationship, where children from a past relationship may need to be protected financially.
  • You both want to make sure that the terms of any property and financial divisions are agreed up from and will not end up in court.

In the end, it is completely up to the individual to decide whether they want to make such a premarital contract.

Marriage Prenup Sydney

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Can A De Facto Relationship Get A Prenuptial Agreement?

The same circumstances that arise in a marriage can occur in a de facto relationship as well. As a result, since 2009, the same laws apply to de facto relationships. This means that a couple in a de facto relationship can get a prenup.

A relationship is determined by law to be a de facto relationship based on matters such as the length of the relationship, your living conditions, whether you have combined your finances and if you have children.

What If I Don’t Have A Prenup? How Can I Reach A Settlement?

Has your relationship broken down? If you are married or in a de facto relationship and don’t have a prenup, it is important to obtain legal advice. A lawyer can help you determine the right distribution of property and finances, and also explain your other rights and responsibilities.

Ideally, you want to stay out of Court and come to an agreement between you and your former partner as amicably as possible. Negotiating a settlement that both your ex-partner and yourself can agree upon will save you lots of time, money and headaches.

Settling is often quicker, easier and cheaper. It will likely get you closer to what you want than what the court decides. To help you through the process, our lawyers can help find a positive solution for everyone involved as quickly as possible.

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Can A Prenup Be Challenged?

Yes. Prenuptial agreements can be set aside by the Court for a number of reasons. The most common include:

Children

The contract may be overturned if it does not cater for circumstances related to future children.

Unfairness

If the prenup is considered not just and fair it may be overturned.

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Unreasonable Pressure

The prenup may be overturned if a partner was unreasonably pressured or coerced into signing any agreements.

Rushed Decision

If one person required their partner to sign the prenup just before the wedding, then the agreement may be overturned.

Non-Disclosure

A prenup may be overturned if the agreement was obtained by fraud, or a person does not make known the full extent and value of their finances at the time the prenup was written up and signed.

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Change In Circumstance

If there has been a change in circumstance in the relation that would make the contract, or part of the contract, impractical.

Any request to overturn any financial agreements must be made to the Court.

If the prenuptial agreement meets the requirements of the Family Law Act, then can be difficult and expensive to try to get a prenup overturned.

Addressing possible outcomes in your relationship (such as future children) can minimise the chance that the contract will be challenged in the future.

You should always talk to a solicitor to help you consider the various scenarios that may occur during your relationship.

Our Sydney lawyers can suggest things to include in the contract that addresses those scenarios and other areas of family law.

Challenging A Prenuptial Agreement

Child Support In Prenuptial Agreements

When entering a binding financial agreement it is important to consider all future possibilities. This includes children. Even if you are not sure whether you and your partner want children, it is important to include details regarding child support and maintenance.

If you do have children in the future, and this wasn’t mentioned in the prenuptial agreement then any understanding is not legally binding.

Under Section 90A of The Family Law Act 1975 prenuptial agreements can only provide for child support if the child has been born and can be named. The exact amount of maintenance will need to be included in the agreement.

Keep in mind that the terms of the prenuptial marriage contract can be overridden by the Court if it is deemed to not be in the best interest of the child.

Children Of Marriage

What Are The Benefits Of A Prenuptial Agreement?

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Makes Divorce Or Separation Easier

Divorce is a stressful time. Prenups make divorce and separations smoother by preventing heated disagreement.

Protection

It can provide protection of valuable assets such as family heirlooms, separate property and businesses owned.

Reduces Conflict

It can highlight the possibility that the parties involved will argue over particular issues. The agreement already dictates how those issues are to be handled.

Save Money

The costs associated with divorce and separation can be significant. This is true when one or both people have many assets and the relationship has ended badly. A prenup can greatly reduce the time spent on extended court proceedings, which can have large costs associated.

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Certainty & Clarity

Prenuptial agreements provide certainty and clarity regarding what would happen if the relationship breaks down. This can result in less confusion when deciding the future of a relationship.

Strengthens The Relationship

A prenup is a great way to open up a dialogue between a couple about the future of their relationship. Couple get a clear understanding of each other’s intentions and allows them to align with where they want to take the relationship. This increases the chance of a happy and successful marriage.

What Makes A Prenuptial Agreement Legally Binding In Australia?

The following steps must be followed in order to make the agreement binding.

  • Each person must receive separate legal advice.
  • The legal advice must be from an Australian lawyer, not from a practicing lawyer in another country.
  • The prenup must be in writing.
  • The prenuptial agreement should be written and signed in the presence of a lawyer.
  • It must contain complete disclosure of all income, expenditure, assets and liabilities.

It is important that a Prenuptial Agreement is accepted by both parties involved.

Each partner should be given adequate time to think and review the Agreement. There should not be any unreasonable pressure on any of the involved parties.

Binding Financial Agreement Australia

What Steps Are Involved In Setting A Up Premarital Agreement

Prenuptial Agreement Process

There are a number of steps for entering a binding financial agreement.

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Step 1. Each person will need to be legally represented by a lawyer in the Australian jurisdiction.

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Step 2. Each solicitor will gather details about the finances, future intentions such as children, existing contributions, estate planning requirements and the agreement they wish to enter.

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Step 3. Each solicitor should provide each of you a detailed letter of advice.

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Step 4. Assessments of the value of your property, libabilities and financial resources may need to be undertaken by valuers and accountants.

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Step 5. The agreement is drawn and negotiated.

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Step 6. When the prenuptial agreement is finalised, it is signed by both yourself and your partner.

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Step 7. Each of the solicitors signs off certificates which form part to the agreement.

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What Information Should I Prepare? (Prenuptial Agreement Checklist)

Preparing basic information can save you time and money when preparing your prenuptial agreement with your solicitor. Here is a checklist of what information you should collect before seeing your lawyer:

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Your Personal Details

Including full name, date of birth, details of any previous marriages, and details of any children.

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Your Partners Personal Details

Including full name, date of birth, details of any previous marriages, and details of any children.

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Your Employment Details

Including the name of your employer, position, salary and any entitlements.

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Your Partners Employment Details

Including the name of their employer, position, salary and any entitlements.

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List Of Your Assets

A list of your assets, liabilities, resources, superannuation/pension entitlements and entities such as companies, trusts, partnerships and business. The more details included, the better.

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List Of Your Partners Assets

A list of your assets, liabilities, resources, superannuation/pension entitlements and entities such as companies, trusts, partnerships and business. The more details included, the better.

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The Intention Of You & Your Partner

Intention regarding division of property on separation, spouse maintenance during the marriage and after separation, superannuation, and children.

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Detailed Documentation

Documents including copies of your last tax return, valuations of property, recent statements of bank accounts and credit cards, entity documentation (financial statements, tax returns, constitutions, trust deeds, list of office bearers)

Frequently Asked Questions

Can I enter into a binding financial agreement after I get married/start a de facto relationship?

Yes. Couples that are already married may enter into a Binding Financial Agreement that details how finances and assets will be divided if the marriage breaks down. However, you will need to talk to a lawyer and enter into the contract according to strict requirements of the law.

Does the agreement be have to registered with or approved by the Court?

No. So long as the contract satisfied the requirements of the Family Law Act it is considered binding.

How long does it take to finalise a prenup?

On average, the contract should take around 4-6 weeks from the time that you and your partner have met your respective solicitors to the time the contract is finalised.

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