Leading up to your much anticipated wedding day, the last thing you want to talk about is a prenuptial agreement, or “prenup.” But let’s just give it a thought for a moment. Some of us make a little more money than our partners or have a business to run. It might not be romantic, but it’s just good business sense to talk to a family lawyer to protect ourselves.
As they say, “Better to have it and not need it, than need it and not have it.”
What is a prenup?
A prenup is a form of Binding Financial Agreement (BFA). It contains the property, assets, and debts each partner has. It also outlines your arrangements if you ever separate or divorce including how any property will be divided. It requires “full and frank disclosure” of each other’s finances, so everything can be properly and fairly divided.
Some things that a prenup can cover:
- a list of each partner’s property and finances
- identification of which property is shared and separate
- how property will be divided if you divorce (you may decide to split it equally, based on percentage of income, or any other way you decide)
- children of a previous relationship and inheritance
- what to do if there are children of the marriage (you can always update your prenup in the future if need be)
- spousal maintenance
Some prenups can contain marital responsibilities and expectations during the relationship that they agree to.
Prenups can be quite an extensive document, but it is important that is covers everything necessary.
How does a prenup work?
A prenup covers all your assets and debts as well as division of property if you ever separate or divorce.
It is a legally binding document that must be in writing. You will need to seek legal advice before signing and to make sure it adheres to the requirements within the Family Law Act section 90B.
No one should feel forced or coerced into signing a prenup though. A prenup can be set aside if a spouse was told that they would not get married unless they signed one. A prenup requires an open and fair negotiation, where there is a mutual agreement both of you are willing to sign.
If it follows legislative requirements, is fair and there was no unreasonable pressure, your prenup must be followed in the event of separation or divorce.
Why should you get a prenup?
We know it’s not something you want to think about right now, but consider a prenup as a risk management plan; it protects your property in case anything happens. It will also reduce stress if you ever need to go through with a property settlement because you will already have a negotiated plan in place.
It is best to get a prenup as early as you can when you have a clear mind. Making crucial decisions during a divorce can be difficult because there are often strong emotions clouding good judgement. With a prenup, the decisions have already been made.
It is also very beneficial to have practical discussions about the future. It can clear things up and strengthen your relationship because you are trying to understand what each other wants in the relationship and how you view it.
What if you’re still not sure about a prenup?
Maybe your wedding day is almost here, or you’re just not sure if you can wrap your head around a prenup right now. That’s okay. You don’t need to enter a BFA before you get married.
You can still protect your assets after you get married with a BFA called a postnuptial agreement. It functions as essentially the same thing, it is just entered into during your marriage instead of before. So ask your lawyer about it and have a chat with your future spouse. Maybe they want to protect themselves too and haven’t known how to approach it with you.
A BFA is a good idea to keep just in case, even if its collecting dust in a drawer on your 70th wedding anniversary <3.
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