A prenuptial agreement (commonly known as a “prenup”) is a kind of binding financial agreement (BFA) that allows parties to pre-determine financial and property issues in the event of a relationship’s breakdown.
Prenups (or BFAs) can give the parties involved peace of mind and a way to avoid the expense, worry, and time involved in litigating financial disputes with a former partner.
BFAs can be entered into before, during or after the breakdown of a relationship between legal adults (18 years or older). They must be in writing, signed by both parties and express that the agreement is being made under the relevant section of the Family Law Act 1975 (Cth).
Both parties must obtain independent legal advice and prove that they have done so. Additionally, there are limits as to the number of binding financial agreements a person can be a party to.
It is important to note that there are different provisions in the Family Law Act for married vs de facto binding financial agreements.
What does a prenup cover?
A prenup covers assets amassed during and prior to a relationship. These assets can include:
- Money
- Property
- Inheritances
- Businesses
- Superannuation
- Investments
Prenups can also determine other financial issues, such as the payment of debts and liabilities, spousal maintenance and the entitlements of current or future children.
Do I need a prenup?
Prenups are not only for the very wealthy. There are many reasons for entering into a BFA with your partner. The suitability for you will depend on your unique circumstances.
Some reasons why parties may want to enter a BFA include:
- Where one party has substantial assets that they wish to protect
- Where a party wants to protect the financial interests of relevant companies and trusts
- Where parties want to bypass the stress, expense and emotional strain surrounding finances that arise following the end of a relationship
It can be challenging to decide whether a prenup is appropriate for your situation. However, the experienced family lawyers at Cleofe Parsons Legal can help you understand your position and offer advice to make sure you’re making the right decisions.
Are prenups legally binding?
Prenuptial agreements are enforceable provided that all prerequisites have been satisfied, as outlined under section 90B of the Family Law Act.
There are situations where a prenup can be challenged and set aside, however. Some situations where the Federal Circuit and Family Court of Australia can set aside a prenup include:
- If the agreement was obtained by fraud
- If the agreement was entered into for the purpose of defrauding or defeating a creditor
- If the agreement is void, voidable or unenforceable
- If a party to the agreement engaged in unconscionable conduct in relation to the making of it
- If since the making of the agreement there has been a material change in circumstances relating to the children of the relationship
How can Cleofe Parsons Legal help?
The experienced family lawyers at Cleofe Parsons Legal can assist you with drafting a prenup that is comprehensive, legally effective and properly reflects your intentions. This is particularly important as prenups are legally required to be in writing. Our lawyers can also review a prenup so that you understand your rights and obligations, as well as negotiate the terms of a BFA so that you are protected against onerous terms.
It is essential that both parties obtain independent legal advice before signing so that the agreement is enforceable.
