Seven Mile Beach, Broken Head
“Bold and Excellent”
Good reasons for a ‘nup’
Catchwords: Family law, prenuptial, post nuptial, financial agreements, binding, before marriage, during marriage, after marriage, no court approval needed, estate planning, assets for children, no stamp duty
Prenuptial and post nuptial “financial agreements” are binding under the Family Law Act 1975. You can enter into a “nup” before marriage, during marriage and even after divorce, without any time limit, and they do not require Court approval or registration to be binding.
They encourage people to agree about how their property should be distributed in the event of separation and the breakdown of marriage. They can cover any or all of the parties’ pre-divorce property or financial resources and include maintenance. It is a way to avoid going to Court, costly legal proceedings and to eliminate must of the stress and trauma of a marriage breakdown.
Often the only way to pay for lawyers, in contested property proceedings, is by the sale of important assets. This can now be avoided. Particular assets and also financial resources can be reserved. These can include a farm, a family business, a home, and an inheritance, superannuation or prior marriage settlement.
Assets can be kept aside, or used for the benefit of the children and not a new partner. There is no State duty or charge on a nup, nor on a deed or instrument for its purposes, so it suits estate planning.
Here are other positive benefits: the security of knowing how property will be divided in advance; more control over the outcome than a Court adjudicated one and at less cost; you can incorporate spouse and child maintenance into the agreement (although it must comply with the child support legislation and an assessment overrides it).
If people make wills in the event of death, why shouldn’t they make “financial agreements” in the event of a breakdown of marriage?
The Court can set aside a financial agreement. Grounds include a non-disclosure of a material matter or fraud; if a purpose was to defeat creditors; if it is void, voidable or unenforceable (say undue pressure); if circumstances since make part of the agreement impracticable to be carried out; if there is a child and material circumstances change; and if it is unconscionable. Careful drafting and preparation, will give the best chance of it being enforceable.
Jonathan de Vere Tyndall
Article updated 7 January 2015, originally published in Country Leader on 16 August 2001
Editors note: The articles published contain comment only and not legal advice, for which you should retain a solicitor. No responsibility is accepted for the accuracy of the contents.