Pre-nups - Insurance for the future
By Wendy Barry
Consultant, Accredited Family Law Specialist, Family Law Team
The break-up of a relationship is devastating on so many levels. Our family lawyers regularly advise people whose worlds have fallen apart after they or their partners have decided to end their relationship.
They struggle with a range of issues: how property is to be divided; future care arrangements for children; how to make income that previously serviced one household now stretch to two. Our lawyers are sympathetic to the grief and anger the situation causes.
It is surprising then how few people enter into pre-nuptial agreements (for marriage) or cohabitation agreements (for de facto relationships, including same-sex) to protect their assets prior to relationships and therefore avoid the trauma of a property settlement with an estranged partner.
It is relatively simple for parties entering a relationship to record their agreement, about how property is to be divided in the unfortunate event of a relationship breakdown.
The trend is definitely changing: couples are increasingly seeing the advantages of being savvy up front, particularly in a time when second and third weddings and de facto relationships are almost as common as first ones.
Promoters of pre-nups see them as insurance for one of the biggest ventures of their lives, and a way to protect both parties against future arguments and legal costs. Detractors argue that such agreements are born out of mistrust or a lack of confidence in the union.
Tindall Gask Bentley, with a family law section of nine lawyers (including accredited family law specialists Jane Miller and Wendy Barry) are well placed to assist clients to create these types of agreements, which are appropriate for all scenarios.
Prime examples of those who should consider entering into pre-nups are:
- People who, entering into second marriages or relationships, might wish to protect prior assets.
- Older people who have never married but have accumulated assets.
- People who wish to secure the inheritances of children from first marriages or relationships.
Others include situations in which:
- Parties might wish to protect property which has been in the family for generations.
- Third-party ownership is an issue.
Pre-nups are a handy way for couples to create their own private law about how their assets are to be divided upon separation. And, because a pre-nup, once executed, will be binding, a number of requirements must be strictly complied with.
If the agreement does not comply, it will not be binding.
Some of the hallmarks of a binding agreement are that:
- The parties will have disclosed their financial circumstances at the time of entering into the agreement.
- It includes a statement that the parties have each received legal advice before signing the agreement.
- It has, as an annexure, a certificate signed by each party’s lawyer confirming that he or she provided the relevant party with independent legal advice.
Pre-nup agreements are not only available to couples contemplating marriage, but also people in or entering de facto relationships, including same-sex de facto relationships. These agreements are known as certified domestic partnership agreements and are only binding if they strictly comply with the Domestic Partners Property Act.
Advice on drawing up these contracts is highly recommended for any couple looking at a long-term commitment.