The Basics of Prenuptial Agreements
A prenuptial agreement, or Binding Financial Agreement (BFA), is an agreement between couples made before a marriage or de facto relationship. The Family Law Act of 1975 allows couples to create a legally binding agreement concerning assets and property in the case of separation or divorce.
Prenuptial agreements aren’t meant to set relationships up to fail. Instead, these agreements simply discuss and clarify potential issues. You may even find that talking about these subjects strengthens your relationship and ensures you and your partner agree on legal matters. A prenuptial agreement can also cover unfortunate circumstances, like the death of a partner.
Here are some answers to common questions concerning prenuptial agreements.
What Assets Can You Include in a Prenuptial Agreement?
A prenuptial agreement determines how a couple’s property and finances will be divided if the couple separates or divorces.
Some of the assets you and your partner may want to add to the prenuptial agreement include:
- Real estate
- Pension entitlements
Financial agreements can outline how assets will be divided, who will be responsible to finalise debts and what financial support is available for either party. You should also include future or current children in their prenuptial agreements.
What Is the Criteria for Prenuptial Agreements?
A couple’s prenuptial agreement must meet strict legal criteria for the document to be legally binding. Otherwise, a family court may overturn their agreement.
For instance, the prenuptial agreement must have signatures from you and your partner. Additionally, each of your lawyers must sign a statement stating that each of you received independent legal advice. Lawyers are required to discuss how the agreement affects your rights, if the agreement is fair for both parties and if
the agreement is necessary.
If the document doesn’t meet these specifications, it is not legally binding.
Can the Agreement Be Overturned Or Cancelled?
Even if your agreement does meet legal criteria, a spouse or partner has the right to challenge the agreement.
The family court could set aside or overturn a prenuptial agreement if they determine one of the following:
- The prenuptial agreement was created fraudulently. For instance, if a partner didn’t disclose all of his
or her assets at the time the prenuptial agreement was created, this lack of information would be considered
- The legally binding criteria wasn’t met. This situation occurs when one party didn’t receive independent
- One of the partners felt coerced or unreasonably pressured into signing the agreement.
- The prenuptial agreement was a last-minute decision before a wedding or was a condition of a wedding.
- The agreement isn’t fair and just for both parties.
- The couple’s material situation changed after the agreement was signed. For instance, if the couple had
kids but didn’t include children in their prenuptial agreement, the prenuptial could be overturned.
If the family court finds your agreement falls under one of these stipulations or questions the validity of your agreement, they can set aside your agreement. Additionally, a prenuptial agreement must be brought to the courts within a year of your divorce or two years from when your de facto relationship ended to be valid.
If you and your partner wish to change or cancel your prenuptial agreement, you must prove one of the following:
- The agreement was signed under fraud.
- The agreement isn’t practical or convenient to fulfil.
- One of the parties was unfair or unethical when creating the agreement.
When you and your partner create your agreement, consider future possibilities, such as children. You can decrease the likelihood of cancelling or overturning your agreement if you plan effectively.
Prenuptial agreements are a great resource for couples who want to keep relationship matters out of court or who want to protect individual assets. Although talking about your agreement may not be the most ideal way to begin a partnership, the document can help you and your partner clarify important situations.
If you are considering a prenuptial agreement, talk with a lawyer to help you draft the document and ensure it is legally valid.