Prenup or Not to Prenup?

It’s not the 1950s. In Australia two generations ago divorce was rare and no one knew what a prenup was. You married in your early 20s, had 2.8 kids, and usually you stayed married, till death do us part.

Society doesn’t plan your married life any more. Marriage isn’t seen as permanent, divorce is comparatively easy, and there’s little social stigma in going through two, three, or more marriages with children from each of them

People going into a marriage today may need to consider more complicated issues. They may wish to protect their existing children, they may have parents who need care or they may simply understand the statistical reality that, today marriages are fairly short-term affairs. They hope for and work towards the best future together, but they use a prenuptial agreement to insure anyway.

Section 90B of the Family Law Act 1975 refers to Prenuptial Financial Agreements before Marriage. Commonly known as a prenup, prenuptial agreements or pre nups, they are most commonly used to protect the assets of the wealthier party in the event of a marriage break down.

Contrary to popular opinion, prenuptial agreements are not just for the rich and famous. Increasing numbers of less famous couples are opting for written prenup agreements to protect the financial assets each partner brings to the relationship.

A Financial Agreement is the method Parliament has set up for you to protect the assets you take into a marriage by predetermining how those assets should be dealt with, if the marriage fails.

A Prenuptial Financial Agreement made under section 90B is a substitute for court action and means that before marriage the parties have negotiated a settlement of their family issues should the marriage end. This means that, at least insofar as they concern money and possibly child maintenance issues, the couple has resolved its issues in advance without needing the court to impose a solution.

For example. An engaged couple with children from prior marriages may use a prenup financial agreement to spell out what will happen to their property when they die. This means they can pass on separate property to their children and still provide for each other if need be. Without a prenuptial financial agreement, a surviving spouse might have the right to claim a large portion of the other spouse's property, leaving much less for the children.

Couples often use prenuptial financial agreements to protect the assets of either partner from debts incurred by the other, or if one party is at risk of being sued.