Prenuptial Agreement
The Family Law Act makes provision for binding financial agreements
between parties to a marriage. These agreements can be made before the
marriage, during the marriage or after the couple divorce. Agreements
entered into before marriage are commonly known as prenuptial
agreements.
Prenuptial agreements can set out how the property and financial
resources of the parties are to be dealt with in the event of the
breakdown of the marriage. They can also provide for the maintenance of
either of the parties during the marriage or after the parties divorce.
There are certain formal requirements that need to be met. In order to
be binding, a financial agreement must be in writing and signed by both
parties. Each party must obtain independent legal advice and the lawyers
advising the parties must sign certificates to say that they have given
independent advice.
Advantages of a Prenuptial Agreement
A well drafted prenuptial agreement, prepared after proper consideration
by the parties as to what they require, can enable a couple to embark
upon their marriage knowing that if the marriage ends they will not have
to fight about the division of their property. This can be particularly
important for someone who has already experienced a marriage breakdown.
Disadvantages of a Prenuptial Agreement
The law
in relation to binding financial agreements between married couples is
very new and there is some uncertainty about how the courts will
interpret the law. It is therefore unclear in what particular cases a
prenuptial agreement will be set aside. If an agreement is entered into
without careful thought then circumstances might arise which were not
anticipated and which make the terms of the agreement unfair.
What
should you do if you want a binding Prenuptial Agreement?
If you
intend to enter into a prenuptial agreement then you must first think
about how you want your property and your future spouse’s property to be
dealt with if your marriage breaks down. You and your partner
should discuss your future plans including:
-
Whether you both intend to work during the marriage;
-
Whether you plan to have children;
-
What arrangements there will be in relation to children that
either of you currently have;
-
What will happen if either of you can't work because of
illness or injury or the need to care for a disabled child;
-
Whether you wish to make special provision in relation to
inheritances and if so what you expect to receive and what you expect to do with
your inheritance;
-
What provision you each intend to make for retirement;
-
How you intend to meet your financial commitments and pay
your living expenses;
-
Whether you intend to have a joint bank account or intend to
keep your finances separate.
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