Is a
pre nuptial agreement for you?
Thanks to the popular press reporting on
the rich and famous, we all know what a pre-nuptial agreement is, more or less.
A pre-nuptial agreement relates to a couple agreeing before they enter into a
relationship how they are going to divide up the assets should the relationship
break down. Some might argue this level of mistrust is not a good start to a
relationship, whereas others, usually those with more money, simply see it as a
way of ensuring their financial future.
In Australia these agreements are referred
to as binding financial agreements (BFA). You can have a binding financial
agreement before getting married, before starting to live together or when
separated. It is critical that the BFA correctly identifies pursuant to which
section the agreement is drafted. Not getting the section right can already
lead to a court deciding the agreement is not valid.
When
should you have a BFA
Be it over a glass of champagne, a romantic
candlelit dinner or some other exquisite setting, the conversation about
wanting your so called loved one to sign a BFA can be a bit of a love dampener.
It is difficult to imagine how the subject could be broached delicately and
tactfully.
‘Darling, you know how you are going to
move into my million dollar mansion on Monday?’ He/she says caressing the back
of the neck of the loved one. ‘Well would you mind just signing your rights
away?’
All jokes aside, a BFA may be beneficial in
the following situations:
1.
Both parties have been previously
married/in a relationship and wish to protect their assets before merging their
lives with another person.
2.
Both of you like the idea of
setting out before hand how any property should be divided if it does not work
out.
3.
One of you has children from a previous
relationship and wants to make sure assets are protected for them.
4.
One party has a lot more assets
than the other and wants to be sure both parties know what is to happen when
the relationship breaks down.
What
if I don’t sign the BFA?
It may be that the new love of your life
will simply end the relationship if you refuse to sign the agreement. As the
law stands the agreement will only be binding if both of you have received
independent legal advice as to the advantages and disadvantages of the
agreement prior to signing and you will need to sign the agreement voluntarily.
The conversation with respect to not
signing the agreement will no doubt be as difficult as the one about signing
the agreement. Love and relationships are about trust and faith; a BFA may
spoil those aspects of a relationship, whereas others like the idea of knowing
what the future holds.
Other
options
There is no other option for setting out
what is to happen with property before marrying or living together than a BFA.
It may be that if you do not sign the agreement, the magic will be gone from
the relationship and you find yourself stranded at the altar.
If you have separated and are confronted
with a BFA you do have the option of what is known in legal terms as
application for consent orders and minute of order.
The above link will provide you with information
on this type of agreement.
Remember that whatever agreement you sign
it will need to be done freely and without any form of coercion by the other
party. An agreement that is signed after much pressure has been applied, may
ultimately not be a binding agreement.
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