03 Oct The Pros And Cons Of A Pre-Nuptial Agreement
Whilst family lawyers are often asked for advice by their clients when a marriage is ending and heading for divorce, they can also play a role before the couple each says, ‘I do’.
We are talking about prenuptial agreements, which you have no doubt read about in newspaper and magazine articles, especially when a mega-rich couple is heading for divorce.
At face value, a prenuptial agreement might seem a perfect way to ensure that, should the couple ultimately divorce, there will not be huge argument s and months of legal wrangling over how the property is split. We say, ‘at face value’ because although prenuptial agreements have many merits, they are not perfect.
First, due to prenuptial agreements being in the celebrity headlines, and often depicted in Hollywood movies, you should be aware that the LA, New York, or London versions of prenuptial agreements, are different from the ones which we have in Australia.
For a start, prenuptial agreements in Australia are actually called ‘Binding Financial Agreements‘, however, for simplicity and understanding, we will continue to call them prenuptial agreements.
In order for one to be regarded as legitimate, both parties must obtain legal advice from their respective lawyers. That advice must include both the advantages and disadvantages of using such an agreement. In addition, both the lawyers must sign the agreement to certify that they have advised their clients about the agreement.
As we’ve said, the prenuptial agreement has pros and cons, and it these which each individual must weigh up before signing. Bear in mind, prenuptial agreements can only be set aside in narrow and specific circumstances, so signing with the intention of not honouring the agreement when the time comes, is not an option.
The reason they can be set aside includes a major material change not covered by the agreement, such as the couple having children. Others are the agreement being obtained fraudulently, the signing being done under unreasonable circumstances, or that no legal advice was sought at the time of the signing.
In most cases, a prenuptial agreement works for both parties and provides several advantages with the main one being that should the couple divorce both parties, and their children in particular, are spared some of the stress and worry of not knowing what the financial outcome will be.