Do I Need a Pre-Nup?
The majority of couples now reside together prior to marriage. It may be worthwhile thinking about legalities of doing so.
A prenuptial agreement, known as a Binding Financial Agreement in Australia is a legal document between parties to a de-facto relationship or marriage. It deals with what will happen to the parties assets and liabilities in the event that the relationship breaks down.
The purpose of the agreement is not to set your relationship up to fail, but rather to put all of the cards on the table and allow each party to discuss any issues that may arise in the future. A Binding Financial Agreement can also assist in clarifying any uncertainties as both parties are required to obtain independent legal advice prior to signing the document.
In de-facto relationships, we recommend parties enter into a Binding Financial Agreement when they commence living together for the following reasons: -
- If one party is moving into the other party’s property;
- If the parties have assets from previous relationships that they would like to pass onto their children, rather than the new partner;
- If one party has significantly better or worse financial position at the commencement of the relationship;
- The agreement can give parties peace of mind that their assets are protected in the event of a relationship breakdown. It essentially operates as a safety net to avoid a battle in the Family Courts;
- The agreement is a more cost-effective solution than going through the Court processes after separation. It also prevents the parties from enduring the emotional stress when going through an unpredictable property settlement; or
- If one party wishes to protect a future inheritance or an interest in a family business.
Although a Binding Financial Agreement and the discussions surrounding the document may not be the most romantic way to begin living together, it may be the most important document that a party signs in order to protect themselves and their assets in the future.