The Hall Payne family law team are experienced at acting for clients wanting to protect themselves financially in the event that they split up with their partner, whether that’s a de facto partner, husband, wife or same sex couple.
A Prenup is a colloquial word for what is really a binding financial agreement and it can be done either before or during a marriage or de facto relationship and after separation or divorce. The agreement provides the basis as to how, in the event that the relationship breaks down, all or some of their property or financial resources is to be dealt with.
Many of our clients have felt safe and secure if they are certain about the basis on which property divisions will take place on separation or divorce rather than leaving it up to a Judge to decide, or having to go through significant negotiations to settle/divide the assets.
Quite often we hear the expression that these documents are “not worth the paper they are written on”. If they are carefully drafted and tailor made for your specific needs by a family law expert, that’s simply not the case.
What’s a Binding Financial Agreement or a Pre Nup and when can you do one?
A Prenup is the colloquial word used for a legally binding financial agreement between couples who want to deal with each other before or during their relationship as to how they will deal with their financial matters in the event of a separation.
It is called a binding Financial Agreement and can be done;
Before you commence a de facto relationship;
During a de facto relationship;
After a de facto relationship ceases;
Prior to a marriage;
During marriage;
After a marriage;
After a separation; or
After divorce.
What does a Financial Agreement or prenup do?
The agreement provides how, in the event that the relationship breaks down, property, maintenance or financial resources of the partners to the agreement is to be dealt with.
Once there is a binding financial agreement in place, the agreement operates rather than the provisions in the Family Law Act relating to adjustment of property entitlements and spousal maintenance entitlements under that law.
It therefore provides the basis on which property divisions will take place on separation or divorce rather than leaving it up to a Judge to decide, or having to go through significant negotiations to settle/divide the assets.
Who does a pre nup or Binding Financial Agreement help?
About one in three marriages end up in divorce in Australia. This does not include de facto relationships that fail.
Often people in second marriages wish to protect assets that they have acquired, but it is not limited to second marriages.
The agreements are used by people who want their property divided in accordance with their own agreement, rather than determined by a court under the law.
These agreements are often used if one or both parties have significant assets or if there is an imbalance in the assets held by one of them. Sometimes they are used by a person owning a business to prevent an application by the other party for a distribution of the business or to obtain control of the business.
Partners sometimes use them to protect things like a farming enterprise or ensure that certain family property such as inheritances, heirlooms or property passed down through the generations ends up in the hands of the person for whom it was intended.
The agreements can be used if you have children from a previous marriage and want to ensure those children retain all or part of the wealth. It can also help if you are blending families and provide a good financial planning tool.
Many people use financial agreements to obtain certainty in the outcome of the property division in the event of a breakdown of marriage. Often it may simply deter someone from proceeding with a claim.
A Financial Agreement could avoid costly litigation following a relationship breakdown.