Despite the common misconception that Financial Agreements “are not worth the paper they are written on”, nothing could be further from the truth. Financial Agreements are an extremely effective instrument whether executed in Pre-Nuptial or Separation Agreement format.
So yes… they do work!
When you start a relationship, the thought of separation (and possibly divorce if you get married) is rarely front of mind. However, in 2020 the reality is that 1 in 3 marriages ends in divorce or separation.
Couples today are getting married later in life and are much more likely to have accrued significant assets by the time they wed. So, while it can be quite an awkward topic, it’s very common and practical to consider protecting your assets and/or consider how you will divide joint assets in case the worst should happen.
You can make a financial agreement before, during or after a marriage or de facto relationship. These agreements can cover:
- financial settlement (including superannuation entitlements) after the breakdown of a marriage or a de facto relationship
- financial support (maintenance) of one spouse by the other after the breakdown of a marriage or a de facto relationship,
- any incidental issues.
For a financial agreement to be legally binding, you must both have:
- signed the agreement, and
- received independent legal and financial advice before signing.
Here are some handy tips to start the conversation.
Start the conversation early
If you think you might want a prenup, its best to start the conversation as early as possible. Be prepared to answer questions and explain what it is you are trying to achieve in entering into a prenup. For example, maybe you have been through a separation before or have assets that you wish to protect such as a business or a property portfolio.
Presenting a draft agreement to your partner without mentioning or discussing it beforehand is a sure way to create tension!
Consider it an opportunity to have an honest discussion about your assets, your partner’s assets and why you are creating, or suggesting the creation of an agreement together.
Although Pre-Nuptial Agreements are typically entered into with high hopes of a long and lasting relationship, they are an acknowledgement that many factors beyond the parties’ control can impact on their relationship. Pre-Nuptial Agreements can also help people move on with greater financial certainty whilst avoiding the high emotional and financial costs associated with litigation.
Pre-Nuptial Agreements should not be entered lightly. They should be entered freely by both parties after giving considerable thought to the idea and should reflect mutual intentions.
Each of you should get independent expert legal advice in drafting and finalising the agreement.
Listen to your partner’s concerns.
Your partner will have needs and concerns that differ from or contradict your own, so listen to their perspective with an open mind.
Leave room for change over time.
A prenup has to account for events that haven’t happened yet. For example, businesses and children that aren’t yet in the picture.
If you are interested in constructing a Pre-Nuptial Agreement or have any questions relating to Pre-Nuptial Agreements, Wiltshire Family Law can help.
We offer a free initial consultation and have a highly trained, caring and compassionate team of family lawyers ready to assist you. Contact us confidentially on 13 20 30.