31 Jan Pre-Nup Timing
A difficult subject to broach oftentimes, however an important one for people who have children from a prior relationship or where there is a considerable disparity of wealth.
There is no perfect time to enter a prenuptial or similar arrangement and the law surrounding these agreements, known as Binding Financial Agreements under Australian law, provides for them to be entered at six (6) different stages of a relationship, including:-
- Before a De Facto Relationship – in other words prior to the parties moving in together;
- During a De Facto Relationship – perhaps after the parties have spent some time living together, but have not lived for 2 years together, which would ordinarily give rise to a property settlement claim;
- After a De Facto Relationship – where the parties have separated and wish to document the division of their assets without having to seek the Court’s approval;
- Before Marriage – a true “prenup” entered before the wedding;
- During Marriage – which has two (2) sub-types – a prenuptial style where it documents how to divide the assets upon separation, or after separation where the parties must await the divorce time frame but wish to document their settlement whilst still remaining legally married; and
- After Divorce – either where applying to Court is beyond the time frame or the parties simply hadn’t turned their minds to settlement of the property of the marriage until after the Divorce process had been completed.
People enter all different types of Binding Financial Agreements, at any of the 7 stages set out above and there is no hard and fast rule about when the perfect time to do so is – it is something that is different for each couple and set of circumstances.
Occasionally one party will be receiving an inheritance, a personal injury payout or other windfall and want to take steps to protect those funds in the event of separation, such that we have prepared Binding Financial Agreements for couples that have been together sometimes for over 10 years, so it is not always the commencement of a new relationship that triggers the need or wish for a Binding Financial Agreement but often there is a financial catalyst.
Separately, where there have been some emotional problems in a marriage or relationship this sometimes will create a need to have a Binding Financial Agreement prepared, so that each party has certainty as to the division of assets and financial support/independence in the event the relationship does breakdown. For these couples, taking the financial aspects out of the equation can often reduce the conflict between them and allow them to focus on repairing the issues in their relationship and moving forward together.
We draft these Agreements weekly (sometimes daily), so please reach out to further discuss the preparation of a Binding Financial Agreement tailored specifically to your circumstances today.