Is prenuptial agreement legal in Australia? |
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| By: Robert Mark | ||||
Prenuptial agreement is a good tool to protect your assets. This article contains information on prenup, and its legal validity in Australia. Prenuptial Agreement A Prenuptial Agreement, also known as a Prenuptial or Ante-Nuptial Agreement, is a contract that two people sign prior to getting married. Its purpose is to define their rights and benefits and to settle questions of property division, alimony, and/or inheritance if the marriage ends because of death, separation, or divorce. It allows the signers to protect assets that they had acquired prior to the marriage. Without such an agreement, current state law requirements will determine these matters. An agreement simply allows the couple to follow their own rules, in as much detail as they wish A similar agreement called a postnuptial agreement is signed after a couple is already married. Domestic partners may also have a cohabitation agreement. Why Prenuptial Agreement? Getting a prenuptial agreement is particularly important in these 8 cases: 1. You are much wealthier than your partner. A prenuptial agreement can ensure that your partner is marrying you for who you are, and not for your money. 2. You earn much more than your partner. A prenuptial agreement can be used in many states to limit the amount of alimony that is payable. 3. You are remarrying. When you remarry, your legal and financial concerns are often very different than in your first marriage. You may have children from a previous marriage, support obligations, and own a home or other significant assets. A prenuptial agreement can ensure that when you pass away, your assets are distributed according to your wishes, and that neither your first family, nor your new family are cut off. 4. Your partner has a high debt load. If you are marrying someone with a significant debt load, and don’t want to be responsible for these debts if your marriage ends, then a prenuptial agreement can help ensure that this does not happen. 5. You own part of a business. Without a prenuptial agreement, when your marriage ends, your spouse could end up owning a share of your business. Your business partners may not want this to happen. A prenuptial can ensure that your spouse does not become an unwanted partner in your business. 6. To prevent your spouse from overturning your estate plan. A prenuptial agreement can ensure that you estate plan works, and, for instance, ensure that a specific heirloom remains in your family. 7. You are much poorer than your partner. Just as a prenuptial agreement can be used to protect a spouse who is well off, a prenuptial can also be used to ensure that the partner who is weaker financially is protected. 8. If you plan to quit your job to raise children. Quitting your job will negatively impact your income and your wealth. A prenuptial agreement can ensure that the financial burden of raising the children is shared fairly by both partners. Is Prenuptial Agreement only for Wealthy? Prenuptial agreements are not just for the wealthy. Many couples do not realize that a marriage merges assets automatically. Any two people with homes, stocks, retirement funds, a business or children from a previous marriage should consider getting a prenuptial agreement. Pre-nuptial Agreements - Essentials There are components that make up a valid pre-nuptial agreement. These are: • It must be in writing – none of the states will accept a verbal pre-nuptial agreement; • It must have the voluntary agreement and signature of both spouses; • It must carry full or fair disclosure at the time it is executed; • It must not be unconscionable – this means that one spouse, as a result of his better bargaining position in the relationship, must refrain from including provisions that are deemed or judged to be unfair to the other spouse; • It must be executed by both parties (and not their lawyers) in such a way that it is recorded as an acknowledgement Some pre-nuptial agreements also carry a sunset clause. This means that it will expire after a certain period of time How to Negotiate Your Prenuptial Agreement Although a divorce is always an emotional disaster, a prenuptial agreement can make divorce less bitter and less stressful. The terms of your prenuptial agreement can be negotiated like any contract. If your fiancée asks you to sign a prenuptial agreement, get a lawyer of your own to review the document to see that it protects your interest in the marriage. Your lawyer will make sure that the agreement is enforceable in a court of law. And you should ask your fiancée to pay your lawyer's fees!! Is Prenuptial Agreement Legal in Australia? Pre nuptial agreements, known as ""binding financial agreements,"" became enforceable in Australia in 2000 with the enactment of the Family Law Amendment Act 2000. The pressure to allow binding pre nuptial agreements resulted from the major societal changes that had occurred in Australia, as in England, during the prior 30 years, such as changing views about marriage, higher rates of marriage breakdown, falling marriage rates, increasing cohabitation in marriage-like relationships and higher rates of second and subsequent marriages. Those pressures had intensified as cohabiting couples in Australia were permitted greater freedom of contract than married couples: ‘This created the extraordinary anomaly that the rights of married couples with respect to self-regulation of their financial affairs were significantly less than those of cohabiting couples'. Nevertheless, the Court will carefully consider following issues in Prenuptial Agreements: 1. Did the party with the most to lose understand the nature of the prenuptial agreement? 2. Did he/she have independent legal advice? 3. Was he/she under pressure to sign? 4. Was there full financial disclosure? 5. Would an injustice be done if the prenuptial agreement Using Net Lawman’s Prenuptial Agreement Template Net Lawman’s prenuptial agreements template are fully customizable and have been drafted by expert team of Solicitors and Barrister. Our template comes with full guidance notes to assist you in completing the agreement. Our prenuptial agreement contains clauses that deal with the following key sections: • The 'matrimonial' home • Contents of the 'matrimonial' home • Other property owned separately • Pre marriage and post marriage property • Pre marriage assets and finances • Post marriage assets and finances • Gifts between the parties • Rights and responsibilities The Court always has discretion to overturn any agreement in family proceedings. Although if legal advice has been taken and the proposals were considered fair when the agreement was made, the Courts are unlikely to contest the couples express wishes which makes the agreement a valuable addition to your legal protection in Australia. Therefore, Net Lawman’s agreement is the only way for a couple to protect their assets. |
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