We’ve all heard about the prenup. A legal agreement made before marriage about the division of assets. But that’s just for rich people, right? Wrong. There are many reasons why not just the upper class are getting themselves prenups. Should you get a prenup? Here are a few reasons why you might actually want to get a prenup before getting married:
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What is a prenup?
In Australia, a prenup is a legally binding financial agreement (BFA) that allows you to make decisions about the division of assets before the pain of a relationship or marriage break up. But you don’t need to be married to get a BFA.
A prenup can protect cash, real estate, investments, property, businesses, inheritances, superannuation, pensions and any obligation to finalize debts or any liabilities as a result of the relationship.
It’s important to consider potential future children and assets.
Who gets prenups?
Obviously, the painfully rich who wish to ensure that anyone they are in love with is not in fact, merely a “golddigger” so that they can protect their assets, but mainly, prenups are used in the case of second marriages, who may want certain assets to be passed down to their children from a previous relationship.
Another reason prenups are used, is for purely emotional reasons rather than financial. Some opt to get a prenup just so that no one can claim that they married for money alone.
Of course, people don’t get married with the view that later in life, they will get divorced. No one hopes for that. Putting a prenup into place is risk management. And if you care about your personal wealth, then it makes sense to protect yourself just in case your marriage fails.
When should you get a prenup?
You definitely should avoid getting one at the last moment, just before walking down the aisle. The idea that a binding financial agreement cannot be made after marriage is a myth. You can sign an agreement at any time, as long as you are not under duress. This is why you could avoid right before the wedding as it could raise issues. So feel free to discuss with your partner a few months into the marriage or even a few years.
How to get a prenup
Okay so if you’re keen on getting a prenup, then you need to first a foremost, both individually get some legal advice before signing. The prenup must comply with the guidelines in the Family Law Act, so it’s best to have it written up by a solicitor. Each person needs to sign the prenup freely and without coercion, duress or any undue stress. It also needs to be in writing and contain a complete disclosure of both individual financial standing.
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