Bowen Buchbinder Vilensky

Pre-Nups: Are They Useful?

By Damien Bowen, Director at Bowen Buchbinder Vilensky Lawyers, and Accredited Family Law Specialist

10 February 2014

Binding Financial Agreements (BFAs), better known as ‘pre-nups,’ are a useful but no means watertight solution to protecting the wealth of you and your children.

In the past it was usually richer, older men marrying younger, asset-free women who wanted a BFA.  These days I’m finding it is just as likely to be younger FIFO workers, male or female, who have accumulated significant savings and/or investments by working very long hours in remote locations.  They now find themselves in relationships with partners who do not have the same assets and earning capacity as them and they are seeking protection for the assets they have worked very hard to accumulate.

BFAs signed before a couple gets married serve the purpose of setting out the division of assets in the event of them divorcing, or for de facto relationships on the termination of that relationship.  A BFA can also be used during an otherwise happy relationship to set out what happens if the relationship breaks down.

BFAs can also be used when a couple who are divorcing or separating are able to come to an agreement about a division of assets as an alternative to court orders.  This can provide an effective short cut, enabling couples who are able to agree on a split of assets, to move on with their lives, rather than get involved in the litigation process and maybe having to wait many months for a judge to decide on the division of assets for them.

But BFAs are not straightforward.  Asking your girlfriend or fiancé to sign a legal agreement spelling out the division of assets in event of divorce or separation is not an area where the law and human relationships sit comfortably.  This will no doubt remain the case unless BFAs become more commonplace.

A second and a very important concern is that Courts across the country have set aside BFAs for a variety of reasons.  These include if there has been a material change of circumstances, such as the birth of a child; if one or both parties did not receive competent, independent legal advice before the BFA was signed, and  other reasons.

Being aware of these reasons is critically important to ensure that, when drafting a BFA, the risk of it being challenged is seriously reduced.

My view is that while a carefully drawn and correctly executed BFA may not guarantee a complete and irrevocable solution, if it is used in conjunction with other legal protection, it can serve as a powerful protection of one’s assets.

Click here for the full article in the BBV Media page.

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