PRENUPTIAL AGREEMENTS: DO I NEED ONE? DO THEY WORK?

In Australia the correct term for a ‘Prenuptial Agreement’ is a 90B Financial Agreement (‘agreement’) under the Family Law Act 1975. Given the high level of marriages that end in divorce, many people entering into a marriage would like to know if the assets they have accumulated prior to the relationship, will be preserved.

You and your future spouse can opt to enter into an agreement however, you should give consideration to the following as it may result in the agreement being set aside by the court:

If the agreement is signed within close proximity to the wedding and one party claims that they were under duress (pressure) to sign the agreement. If you would like to enter into an agreement, make sure you have plenty of time prior to the wedding. There is also an option of entering into an agreement after the wedding but keep in mind you will already be married and you cannot force the other party to sign the agreement.
One of the difficulties with the requirement for each party to obtain independent legal advice is, that you have no control or insight into what advice has, or has not, been provided to your future spouse. The advice they receive is privileged. In the event he or she was not provided with the appropriate advice, it may be grounds to have the agreement set aside.
The agreement is an attempt to preserve your assets in the event of a separation. What can cause difficulty in the future is if the nature of your assets change, say for example, you sell a property and contribute the funds to other assets accumulated during the relationship.
The Court does have the discretion to enforce the agreement in the event it is considered that it would be unjust and inequitable to not enforce it. Arguments can arise however, that an agreement should not be binding in circumstances where children need to be provided for, one party is unemployed or becomes seriously ill.
When signing an agreement both parties are required to make full and frank disclosure of their financial circumstances. In the event that one party fails to make full and frank disclosure this is also grounds to have the agreement set aside.
If at the time of separation the majority of your assets were not held here in Australia, and the agreement was contested, the appropriate forum would be the country where the majority of the assets are owned. An Australian Agreement is not legally enforceable in other jurisdictions, but could be submitted into evidence to show the intention of the parties when entering the marriage. Ultimately it would be a matter for what jurisdiction you are in and what law applies in that country.

Still not sure? Contact us, and we will be happy to assist.