Prenup Agreements in Sydney
Before you marry, secure your financial future
Let’s face it. No one wants to talk about prenup agreements. It’s uncomfortable thinking about what would happen if your marriage doesn’t work out.
We can’t predict life’s twists and turns, especially the impact they have on a marriage. But a prenup agreement can help a marriage by underpinning it with some certainty and security.
Prenup agreements aren’t only for the wealthy. Everyday Australians increasingly use them.
What is a prenup agreement?
A prenup agreement is also known by its full name, prenuptial agreement.
It’s an agreement that a couple makes before they get married (or before they start living together as a de facto couple).
A prenup agreement is a type of binding financial agreement (BFA)
It’s a contract that sets out what will happen to the property of each party, and the property of the relationship, if the marriage ends. Like a BFA, it can also deal with other issues such as spousal maintenance and child support.
Property refers to the assets and debts of both parties. For example:
- Real estate
- Credit card debt
- Business assets
By making a prenup agreement, the couple is agreeing how to divide their property if the relationship breaks down. The aim is to avoid the cost and inconvenience of involving the Family Court.
A prenup agreement can also be relied on if one partner dies and their executor is distributing their estate. Provided the prenup is valid, the executor must follow the agreement.
Who should make a prenup agreement?
If you’re thinking of moving in with your partner, or planning to get married, you should consider making a prenup agreement if:
- It’s your second marriage, and you wish to keep separate some of the assets from your first marriage. This will allow you to pass them onto your children
- One of you has more assets or more debt than the other
- You want to protect your interest in a family business
- You expect a significant inheritance and want to protect your interest
Of course, these are only a few examples. There may be other situations in which a prenup agreement is appropriate. If you’re uncertain, it’s best to get legal advice as soon as possible.
What are the requirements for a prenup agreement?
A prenup agreement must be made in a certain way to be valid. Being valid means it can be relied on as a legal agreement and enforced if necessary. The agreement must:
- Be in writing
- Be made according to the prenup provisions in the Australian Family Law Act
- Be made between adults. That is, both parties must be at least 18 years of age
- Be understood by both parties
You must get independent legal advice from a lawyer who has no connection to your partner.
This step is crucial. An experienced family lawyer can assess how the agreement will work for you in the long term and tell you whether it’s likely to meet your needs. Your lawyer can also identify any disadvantages to signing the agreement and advise you whether it will work for you.
The agreement is invalid if you and your partner haven’t received independent legal advice.This means it has no effect and can’t be relied on by your partner (or you) if the relationship breaks down.
Under no circumstances should you sign an agreement before receiving independent legal advice.
What if I’m pressured to sign a prenup agreement?
No one is allowed to put pressure on you to sign a prenup agreement. Not your partner, not their family, not your family. No one. If you’re pressured into signing an agreement, it’s invalid.
The law says that if a person is forced to sign a prenup agreement, they’re entering into that agreement under duress.
To ensure that neither of you is pressured to sign, you must get independent legal advice.
You must also have plenty of time to consider whether to sign the agreement. It’s not acceptable to see it for the first time, just a few days before your wedding or before moving in together. You must have significant time to:
- Consider the agreement
- Get legal advice
- Negotiate any changes
What is a reasonable time will vary depending on the situation. For example, if English is your second language, you may need extra time to find an interpreter.
No one is allowed to put you in a position in which you feel you have no choice but to sign. For example, one case found that a woman signed a prenup agreement just four days before her wedding. If she didn’t sign, there would be no wedding, and she faced deportation. Because she was in a weak bargaining position, she was at a special disadvantage because she couldn’t make a decision that was in her best interests.
If you feel under pressure to sign a prenup, you will need urgent legal advice from our prenup agreement specialists.
How do I make a prenup agreement?
You may have a prenup agreement to sign, or you may want to have one drafted to give to your partner. Either way, we can help.
In both situations, we start by identifying as much property as possible: what you own, what your partner owns, and what you’ve bought jointly. We also look at what you owe.
Once we’ve identified all assets and debts, we work out what they’re worth, and their possible value at specific points in the future.
Then we take into account any children, and whether you’re likely to have any more children.
We also get details from you about whether there’s any property you want to protect or preserve, for example, if the property from your first marriage should be left to the children of your first marriage.
We consider your current lifestyle and expenses, and your future needs. We’ll compare this with the cost of living, now and in the future.
Once we have all the information, we’ll assess how an agreement will best provide for you. We’ll give you advice about what the agreement should include, or whether you should sign one that’s been drafted for you.
It’s a detailed process. To get a proper understanding of all the financial circumstances and implications, we need the time to analyse, ask questions and seek information. That’s why it’s essential that you, and we, have enough time to make a proper assessment of how the prenup agreement will impact you.
Act today to secure your future
We’ll help you sort out your prenup agreement so that you can get on with your life together.