Prenuptial and postnuptial agreements, although popularised by celebrities, are prudent measures which enable parties to a relationship to have certainty and control over their future finances without the need for the matter to proceed to Court.
These agreements are an important consideration for every couple as they can protect certain assets from being subject to division if prepared correctly.
What are Postnuptial and Prenuptial Agreements?
Prenuptial (“prenup”) and postnuptial agreements are Binding Financial Agreements between a couple in a marriage or domestic partnership which stipulate the division of assets in the event of separation.
A prenup agreement is usually entered into prior to marriage to govern how assets are divided if separation occurs, but they may also be appropriate for de facto relationships.
A postnuptial agreement on the other hand is one which is entered into during the marriage or during the de facto relationship.
Key Considerations in Drafting Prenuptial or Postnuptial Agreements
In drafting prenuptial or postnuptial agreements, attention should go beyond existing assets and liabilities. Consideration should also be given to future acquisitions, changes in financial circumstances, and possible additions to the family like more children.
The agreements must also factor in unforeseen changes, like shifts in career or income.
A well-drafted prenuptial or postnuptial agreement should be thorough, enforceable, fair, and capable of standing up to judicial scrutiny. This level of detail contributes to a robust agreement that protects both parties’ interests over time.
Ensuring Legal Compliance in Prenuptial or Postnuptial Agreements
Securing the legality of prenuptial or postnuptial agreements involves meeting specific requirements. Firstly, the agreement must be in written form and must carry the signatures of both parties involved in the relationship, validating their acceptance of the terms.
Moreover, it’s mandatory for each party to have sought independent legal advice from different lawyers. This ensures that both parties fully comprehend the implications, advantages, and potential disadvantages of entering into such an agreement. For lawyers to be able to provide such advice, there must be full financial disclosure between the parties.
Lawyers can provide insights into the complexities of prenuptial or postnuptial agreements, reducing the likelihood of future disputes and misunderstandings.
Role of Family Lawyers
If a prenup or postnuptial agreement is not drafted properly, it can be overturned by the court. Additionally, prenuptial and postnuptial agreements which are not drafted by a lawyer are not legally binding in Australia. Therefore, it is imperative lawyers are involved with these agreements. Further, both parties must have legal advice from separate lawyers.
Enforcing and Challenging Agreements in Court
The Federal Circuit and Family Court of Australia can overturn or set aside these agreements if:
- it is determined that the agreement was obtained by fraud,
- the legal requirements were not satisfied,
- there has been a material change since the agreement was made which was not considered in the agreement, such as the addition of children, or where a party has been involved in unconscionable conduct.
Although prenup and postnuptial agreements are often thought of as taboo agreements sought only by celebrities, they can prevent costly Court proceedings and ensure the security and certainty of assets.
Frequently Asked Questions
What is a prenup agreement?
A prenup agreement is an agreement entered into prior to marriage or de factor relationship, which secures the division of assets in the event of separation.
Is a prenup legally binding in Australia?
Yes, a prenup is legally binding in Australia IF it has been drafted correctly and the legal rules have been adhered to.
Can you fight a prenup agreement?
Yes, a prenup can be challenged in court and may be overturned if the court determines the agreement is invalid or material change has occurred since drafting which would make upholding the agreement unjust.
How much does a prenup cost in Australia?
The cost of a prenup depends on many factors such as the complexity of the agreement. It is best to request a quote directly form a lawyer who deals with prenuptial agreements in order for your specific circumstances to be considered.
What is a postnuptial agreement?
A postnuptial agreement is a Binding Financial Agreement which is entered into after the commencement of a de facto relationship or marriage which secures the division of assets in the event of separation.
How much does a postnuptial agreement cost?
The cost of a postnuptial agreement depends on many factors such as the complexity of the agreement. It is best to request a quote from a lawyer who deals with postnuptial agreements in order for your specific circumstances to be considered.
How to get a postnuptial agreement?
To make a postnuptial agreement, both parties need to obtain independent legal advice and then the agreement is drafted by a lawyer ensuring compliance with the legal rules.
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Kate Scolyer – Solicitor– Matthies Lawyers
Should you wish to obtain advice regarding your family law matters, please contact Matthies Lawyers for an obligation-free consultation or call +61 3 8692 2517 today
Disclaimer: This article contains general information only and is not intended to be a substitute for obtaining legal advice