Before you get married, you or your partner may want to arrange to have a prenuptial agreement drawn up – also known as a Binding Financial Agreement. The agreement records who owns certain assets and property, what assets are shared, and what happens to your finances if the marriage ends. You can also enter into a Binding Financial Agreement after you are married, or if you are in a de facto relationship. Contact our family lawyers today to discuss your prenuptial requirements.
These agreements are useful if:
- One party has more significant assets at the time of entering into the agreement
- Relationships where one or both parties have previously been married or in a de facto relationship and have significant assets.
You and your partner must provide full disclosure of each other's financial circumstances and each of you must obtain independent legal advice. Assets can include cash, real estate, investments, superannuation, inheritances as well as detailing any obligations for debts and liabilities created within the relationship.
Speak to one of our family lawyers in Cairns about preparing a Binding Financial Agreement today.
What is a prenuptial agreement?
A prenuptial agreement (or Binding Financial Agreement) is a legally enforceable written agreement entered into by two people who are planning to live together (or already are living together) either as a married couple or in a de facto relationship. The agreement defines the financial and property rights of each person if the marriage or de facto relationship ends.
The terms of such an agreement may be that each person will keep their own separate property in the event of a separation and that neither person will make a claim on the other’s separate property. As every relationship is different, the terms can be tailored to suit, but they must be clear, agreed by both parties and comply to strict legal guidelines.
A prenuptial agreement should include:
- a balance sheet of each person’s assets and liabilities at the time of entering into the prenuptial agreement
- details of how each person’s separate property is to be treated in the event of a separation
- details of how joint or community property is to be treated in the event of a separation.
Each prenuptial agreement will have certificates of independent legal advice for each person’s lawyer to sign, and a separation declaration to be signed by one party if the couple separates, to confirm that the parties have separated. We recommend that there is full and frank financial disclosure by you and your partner before the terms of the prenuptial agreement are drafted. This means there will be no surprises and any areas which do require discussion, can be identified quickly.
When is a prenuptial agreement appropriate?
A prenuptial agreement is appropriate if one or both of you have an asset or financial resource (such as superannuation) of significant value at the time of entering into the agreement that you want to protect in the event that the marriage or de factor relationship ends. Alternatively, the person with no significant assets may suggest a prenuptial agreement to alleviate any stress in the relationship regarding the motivations for marriage.
Prenuptial agreements should be entered into freely and without any pressure and be finalised well before your wedding day. If your partner suggests that you enter into one a week before the wedding, then it is usually not appropriate to sign such an agreement.
If you have any questions or concerns about prenuptial agreements, we recommend speaking to an experienced family lawyer for legal advice as soon as possible.
Enforcing a prenuptial agreement
The prenuptial agreement is legally binding and enforceable, but if the agreement is not drafted correctly, it may be deemed invalid and completely set aside by the court.
The prenuptial agreement comes into effect when the couple separates. If one party does not comply with the terms of the agreement, an application can be made to the Family Court of Australia asking them to enforce the agreement. The court will determine the validity of the agreement (as well as its enforceability) and can then make an order that the terms of the agreement are enforced.
In certain circumstances, the court can set aside prenuptial agreements – for example, if the agreement does not comply with the Family Law Act, if there is fraud, or if there was undue influence or non-disclosure when the agreement was made.
Contact our family lawyers today and make sure you protect what you're entitled to.
Does a prenuptial agreement apply in a de facto relationship?
The term “prenuptial” specifically refers to an agreement entered into prior to marriage. The agreement outlines what is to occur in the event that the marriage does not proceed, or in the event that the marriage ends. If you are in a de facto relationship, you can make an equivalent agreement known as a Cohabitation Agreement.
This type of agreement is a good way of protecting your financial position at the beginning of a relationship.
You can make a cohabitation agreement:
- before you move in together
- while you are living together.
We recommend that you seek expert legal advice in relation to prenuptial and cohabitation agreements.
Frequently Asked Questions
Benefits of a prenuptial agreement
Prenuptial agreements outline how each party’s assets, liabilities and superannuation including their joint assets will be divided in the event they separate. In addition, where there is a valid prenuptial agreement the jurisdiction of the Federal Circuit and Family Court does not apply. You should seek independent legal advice from an expert family lawyer to ensure a prenuptial agreement serves your best interests in relation to your circumstances.
Disadvantages of a prenuptial agreement
Prenuptial agreements can be overturned by the Federal Circuit and Family Court in certain circumstances. Prenuptial agreements should be reviewed if the circumstances of the parties change. For example, if you do not have children when you enter into the agreement but later have children, the Agreement should be reviewed and the parties should consider entering into a new Agreement which contemplates the change in circumstances.
Each party will need to obtain independent legal advice prior to entering into the Agreement.
Useful Articles
“He Cheated On Me, Now I Get Everything!” ~ Myth Busting Divorce And Separation
We understand that to find out that your significant other has been unfaithful is a hurtful and often…
Q&A – Financial Agreements. Everything you need to know
What is a Financial Agreement? A Financial Agreement, or more correctly, a Binding Financial Agreement,…
Why You Need a Lawyer For Your Financial Agreement
As divorce lawyers, we are often asked whether it is necessary to have a lawyer to act in relation to…
