In Australia, Binding Financial Agreements, colloquially known as pre nups, are becoming more common, particularly for people who are beginning or in a second relationship or marriage. You are far more likely to see eye-to-eye at the start of the relationship to reach an agreement about what happens if and when you separate.
These agreements are not like the pre nups you see depicted in TV shows and movies, unlike what you might see on the small screen, a Binding Financial Agreement in Australia won’t include clauses which say that if you cheat on your partner you get nothing (straight out of White Lotus, who would cheat on the beloved Jennifer Coolidge anyway?) or have provisions saying you get more money if you have a boy as opposed to a girl (just like what Trey asked Charlotte to sign in the very early days of Sex and the City).
The type of clients who I recommend Financial Agreements to, are those who want to avoid an argument in the future, or worse still, a Court battle and are happy to sit down and agree on issues like: ‘what happens to my super if we split?’, or ‘what happens to my inheritance if we separate?’.
They can also be used by people who are already in a de facto relationship, and even for those who are already married (often referred to as post nups). Binding Financial Agreements are also appropriate for those in the LGBTIQ+ community.
Once the Financial Agreement is agreed to by both parties, properly drafted, the parties have had independent legal advice and it is signed, it is binding on both parties. This means that if they separate in the future, they have to abide by the terms of the agreement, and cannot ask the Court to do something different.
The premise behind one of these pre-nuptial agreements (or post nups!) is for both parties to reach an agreement, while they are on good terms, about what will happen to their assets if they later decide to separate, when they might not be as amicable.
In some cases, the parties will enter into an BFA at the start of the relationship and then re-evaluate their circumstances after a few years and enter into a new Agreement.
Once the Financial Agreement has been drafted by a lawyer and is agreed to by both parties, the parties are both required have had independent legal advice and for the document to be signed. Once signed, it is binding on both parties. This means that if they separate in the future, they have to abide by the terms of the agreement, and cannot ask the Court to treat the circumstances differently.
For example, a typical BFA might say that, if the parties separate in the future, they will each keep whatever they had at the start, and then divide anything they acquire together 50/50. These Agreements can also stipulate that the parties cannot make a claim against each other’s gifts from family or past or future inheritances.
Is it romantic? No. Is it sensible? Yes.
For advice that is particular to you and your circumstances, please contact us to arrange an appointment.
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Article By: Kasey Fox
Director
Kasey began her family law career with us back in 2004 and was made a Director in 2013. Originally from Alice Springs, Kasey has made Canberra her home more than 17 years. She is pragmatic, thorough, passionate about her work and very protective of her clients. When necessary, Kasey is a fierce litigator, but she also is an advocate for Collaborative Law and tries to reach negotiated outcomes whenever possible.