A prenuptial agreement – colloquially known as a ‘pre-nup’ – is not a warm and fuzzy concept. In fact, many people in a blossoming relationship would regard the mere suggestion as romantic heresy. Why sabotage our future by planning for its end?!
But there’s another way of viewing a pre-nup: as security. Security is a common denominator in all strong relationships, personal and professional alike. When each party is comfortable about where they stand, the relationship can move forward with confidence and stability.
For couples in a de facto relationship or considering marriage, a pre-nup removes individual doubts and concerns that often remain unspoken. In situations where people are bringing assets to the relationship, a ‘pre-nup’ can provide comfort and peace of mind.
But to survive Australia’s Family Law system, which can be used to set aside these agreements retrospectively, ‘pre-nups’ need to be carefully drafted. In 2017, the High Court of Australia overturned a prenuptial agreement between a local millionaire and his much younger, overseas bride on the basis she signed it under duress.
The ruling of the landmark judgment was that existing inequalities between the individuals need to be taken into account. Determining where these inequalities lie, and how to accommodate them in the pre-nup, is now key to the agreement being watertight.
This will often require a trained eye. Our expert team at Tonkin Drysdale Partners has an extensive record of drawing-up pre-ups that reflect the status of the relationship, and also cater for changes or developments to the relationship, such as children or the acquisition of more assets.
If you require advice about constructing a prenuptial agreement, please contact Lee Pawlak, head of our Family Law team on 02 4341 2355.