Something I commonly hear when talking to non family lawyers is: “I’d like my clients to protect their assets from divorce, but prenups aren’t binding in Australia…”
Well actually, they are!
Prenups (or as we know them: ‘Binding Financial Agreements’ – BFA’s for short) ARE legally binding (provided they are done properly). BFA’s can be entered into by married couples, de facto couples and same sex couples.
And they are not as uncommon as you might think. With such a high rate of separation and divorce in Australia, many people who have already been through a divorce and property settlement are keen to avoid going through ‘the system’ all over again in their next relationship. BFA’s give them an option to agree with their new partner what will happen if they do separate in the future. This means they have the conversation about what each of them thinks is ‘fair’ at the start of the relationship, rather than at the end, when they are less likely to see eye to eye.
BFA’s are also a popular choice if one person expects to receive a large inheritance in the future, or a large gift from family members, and wants to protect that from a claim by their spouse in the event of separation. BFA’s can also cover things such as: property owned at the start of the relationship, superannuation, trusts, companies, spousal maintenance and even lottery wins.
Already married or in a de facto relationship? It’s not too late! BFA’s can also be entered into after the start of a de facto relationship or marriage.
Are BFA’s complicated and expensive? Yes, they can be, but for a BFA to be an effective protection for you, just like any contract, it needs to be very detailed. And compare that initial expenses against what you might have to pay if you end up in Court. Think of it as an insurance policy – you pay for it as protection ‘just in case’ and then hope you will never need to look at it again.
Prenups / BFA’s do not have to be the big scary romance killer that a lot of people think they are. It is all about having a conversation now (when things are good) about what each of you think would be appropriate if you do separate, and then having that agreement made binding.
Thinking about a BFA? You will each need independent advice from your own family lawyer.
Contact Farrar Gesini Dunn for an appointment with one of our solicitors to discuss how we can help you.
Kasey Fox is a Family Lawyer at Farrar Gesini Dunn in our Canberra Office