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Pro Pre-Nups? A view from our Sydney divorce lawyers
Sydney divorce lawyers tell all you need to know about a pre-nuptial agreement
We often here of the term “pre-nup” where ever Hollywood stars are concerned.
Better known in Australia as a Financial Agreement, a pre-nuptial agreement (pre-nup) is traditionally a legally binding agreement signed and sealed by a couple. Under the law, a marriage bears the same similarities as a contractual agreement. For this reason these agreements may provide peace of mind.
Pre-nup agreements also work in favour of couples who have children from previous marriages. In this, they can ensure that they inherit the value of assets they may have accumulated prior to the second marriage.
The Fine Line Between Pre-Nup and Trust
Misconceived as a “back-up plan” pre-nups can cause tension amongst individuals. However it can also be seen as trust-building. This is due to the fact that both parties are required to disclose confidential information.
According to part VIII A of The Family Law Amendment Act 2000 a pre-nup must be drafted either:
- Before a marriage
- During a marriage
- After a marriage
A pre-nup make provisions for how property/assets will be divided. This is only the case if the relationship dissolves.
Even during a marriage an agreement can be drafted. This is in accordance with section 90C of The Family Law Amendment Act 2000.
Further, pre-nups can be drafted after a marriage. Following the granting of a decree nisi to a couple who has filed for divorce, a pre-nup establishes the ground rules for how assets will be divided.
In order for either of the three types of Financial Agreements to be binding, each must:
- Have the signature of both parties
- Hold a statement that both parties have sought legal advice
- Still be valid by law
- Have two copies- the original given to one party and a copy given to the other party
Pre-nups also extend to de-facto and same-sex couples.
How do you decide if you need a pre-nup or not?
Many couples may, at some point or another, deliberate if they would like to enter into a pre-nuptial agreement or not.
The better instances to enter into a pre-nup include:
- when there is an inheritance one party may soon be entitled to
- if one party has a great deal of assets
- to decide on an outcome in advance.
In the event of a dissolution, a pre-nup avoids future formalities. This includes court proceedings and any complications. Further, pre-nuptial agreements also provides prior settlements of alimony or spousal maintenance.
Pre-Nups For and Against:
Why does a lawyer need to draft a pre-nup?
Liability limited by a scheme, approved under the Professional Standards Legislation.