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Prenuptial Agreement

More frequently spouses who propose to enter into a De facto Relationships or intend to marry are wishing to minimise conflict in the event that despite their best efforts, the relationship might not work out. Since 2002 in relation to married couples and 2009 in relation to De facto and same sex couples; the legislation has provided parties with a mechanism whereby they can enter into a binding financial agreement / prenuptial agreement which will govern the separation of their finances in the event that the relationship should break down.

There are certain requirements that must be followed to ensure that such agreements are binding.

The requirements include:

(a) That each party must be independently legally advised.

(b) The Agreement needs to identify the relevant legislative section that is relying upon.

(c) The Agreement needs to comply with the Family Law Act in terms of the specifics of what is being released and on what terms.

The court has a limited ability to rectify a defective agreement, however on the whole, if those legal requirements are not met, the parties can enter into an agreement but it may not be binding.

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Why you need to speak to a family law lawyer when thinking about a Prenuptial Agreement

At Matthews Folbigg Lawyers we work closely with our clients to ensure they are well aware of their entitlements when undertaking a property settlement. Matthews Folbigg family law specialists regularly provide professional advice to clients about how to protect their assets in the event their marriage or relationship breaks down, by entering into a prenuptial agreement.

Our lawyers have extensive experience in drafting prenuptial agreements.

Why you need to seek advice from a family law lawyer about obtaining a prenuptial agreement?

Prenuptial agreements are very complicated and require strict compliance with the legislation for the prenuptial agreement to be valid. A prenuptial agreement is binding on the parties to the Agreement if, and only if:

  • The prenuptial agreement is signed by both parties;
  • Before the agreement is signed, each party is provided with independent legal advice from a legal practitioner as to the following matters:
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The Sydney Property Market – How Family Law Lawyers deal with this?

In Blackwell & Scott (2017), the Full Court considered whether the Trial Judge had made an error by setting aside consent orders that were entered into by the parties.

These property consent orders were made; which were to an equal division. In order to give effect to this equal division of property, the parties negotiated and entered into consent orders that provided for (in summary):

  1. a property held in the husband’s sole name be sold and the parties were to share equally in any proceeds of sale exceeding $440,000;
  2. pending the sale, the husband will be responsible for the mortgage payments, outgoings and other expenses;
  3. that the husband retain a second property also held in his sole name and on the payment by him to the wife of $130,000 within 90 days of the orders, the wife shall relinquish any right, title and interest in this property; and

The husband breached the consent orders and did not make the $130,000 payment that he was required to make to the wife within 90 days.
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Prenuptial Agreement upheld on Appeal – De Facto Relationship with one woman while married to another

In the recent decision of Sha & Cham [2017], the Full Court of the Family Court of Australia considered an appeal by the Appellant Husband (who we will call Mr B) and the Respondent De Facto Wife (who we will call Ms C).

Background

The appeal arose from the first instance decision of His Honour Judge Johnston in proceedings before the Family Court of Australia. In those proceedings Ms C bought an application seeking injunctive orders and enforcement of a s90UC Binding Financial Agreement, more commonly referred to as a prenuptial agreement which She and Mr B had entered during the course of their relationship.

Judge Johnston found that the parties were in a de facto relationship. As such, Ms C was successful in the Family Court.

The Facts

Mr B married Mrs B.

Mr B meets Ms C in a massage parlour and they commence a sexual relationship that evening.

Mr B continues to live and be married to Mrs B.
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Prenuptial Agreement

Going into a marriage or de facto relationship, couples do not plan to fail, however often couples fail to plan, overlooking benefits that a prenuptial agreement may have.

A binding financial agreement is a way that couples can plan out the potential future rights or obligations of either party in the event that the relationship doesn’t work out. Such an agreement can be made before or after entering the marriage or de facto relationship.

What can the agreement include?

Prenuptial agreements can cover a range of assets, financial resources and liabilities that are often precluded from individuals minds. Such areas other than income that may be addressed by a prenuptial agreement may include:

  • Superannuation
  • Inheritance
  • Trusts
  • Businesses
  • Real Estate
  • Investments
  • Pensioner entitlements
  • Debts and liabilities

What are the benefits of a prenuptial agreement?

Although often viewed as a negative way to commence a relationship, a prenuptial agreement could serve as a positive way for couples to openly communicate about the potential distribution of assets and debts as well as any expectations either individual may have.

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