Deciding to get married should be a momentous and happy time for all couples. While marriage is a big and exciting stepping stone in life, when planning your future together with your significant other you also need to consider all possibilities. This is where a prenuptial agreement comes in.
What is a Prenuptial Agreement (Prenup)?
A prenuptial agreement is an American concept and as the name implies, it’s an arrangement which is specifically determined before you get married. In Australia, a prenuptial agreement is referred by the Family Law Act as a Binding Financial Agreement (BFA).
The agreement records what assets and debts each person brings to the relationship and states what will happen if the relationship results in a separation or divorce, and how your collective and individual finances will be divided. While it’s never a nice thought thinking about what would happen if your relationship breaks down, it’s better to establish an agreement while you’re happy with your partner as it could save you a lot of time and money in the long run – just in case! Usually, it’s used to specify that both sides will keep everything they each brought to the relationship but anything taken on board together is dealt with separately, which is where things can get complicated.
Why do I need a Binding Financial Agreement (BFA)?
Everyone has different circumstances but there are several reasons why you should consider a BFA, especially if:
- You have more money, property or assets than your partner
- Your partner has a large amount of debt
- One or both of you have been married before
- You own a business
What are the Benefits of having a BFA?
There are several benefits from getting a BFA in your relationship. The main advantage of having a BFA in place is ensuring you’re financially protected if your relationship ends. If the circumstance does arise, a BFA can also help you by:
- Facilitating a swift and smooth separation process
- Minimising legal costs
- Providing clarity and certainty of your entitlements
What does arranging a BFA involve?
Arranging a BFA can be a complex matter. It must comply with the strict legal guidelines as outlined in the Family Law Act (1975), and each person in the relationship needs to have received independent legal advice before making a commitment and signing. You should also be aware when putting together a BFA that in some circumstances which involve any future children, unreasonable pressure from a partner and incomplete disclosure of your assets then the agreement may not always be enforceable.
At Le Brun & Associates, our family lawyers regularly advise on and prepare Binding Financial Agreements, whilst always ensuring our clients are comprehensively protected and fully informed at all times about their individual situation.
If you’d like to know more about how a BFA applies to your circumstances, we offer a FREE 30 minute consultation with one of our fully qualified and professional lawyers. Contact us today to find out more.