Since 2000, pre-nuptial agreements have been enforceable in Australia pursuant to the Family Law Act. These documents are called Binding Financial Agreements
Financial Agreements can be made before, during or after marriage, and cater for both property and spousal maintenance. Typically, they contain clauses which effectively mean that one party to the marriage retains a property owned prior to the relationship, regardless of other contributions during the marriage.
For a pre-nuptial agreement to be enforceable, it must meet certain requirements including being in writing and each party receiving independent legal advice explaining the advantages and disadvantages of entering into the agreement.
These agreements can cover some or all of the property of the parties.
There are not many situations as difficult for a solicitor, when a teary client produces a pre-nuptial agreement and he or she is faced with a sign up or ship out decision. Perhaps that relationship may have some other issues that need to be faced, but it is a difficult time for all involved when the wedding plans are interrupted with a sheepish groom asking “honey, will you sign this”. Arrangements should be made well in advance of the nuptuals.
The legislation shows a real intent to give enforceability to agreements, however they are escapable in some circumstances. The rules are similar to contract law, where if fraud, uncertainty, and unconscionable conduct are proven, they can be set aside.
Statistics show that people who have been previously divorced are more likely to seek an agreement, rather than those marrying for the first time. They typically have more assets, and possibly are a little jaded.
There are people who treat them simply as a legal need, such as a will or appointing an enduring guardian but there are many who are critical of preparing for a breakdown of the relationship.
With figures for marriage failures as high as 50%, many consider it sensible planning to discuss an agreement, suggesting that those couples who have difficulty discussing same have issues and expectations not yet addressed.
There are certainly suggestions that pre-nuptial agreements provide an incentive for couples to stay together, or more accurately, less incentive to divorce.
There are similar agreements for de facto couples, with the document commonly called a Cohabitation Agreement.
If you have any questions you would like answered either confidentially or via this medium, please email us office@mjolegal.com.au
This is intended for general information and does not constitute legal advice and should not be relied upon as such. Formal legal advice should be sought.