FamLaw: But I signed a prenup!

The world of celebrity marriages, break-ups, divorces and messy court battles is often responsible for many of the misconceptions in Family Law. Besides the fact that Hollywood falls under a different legal jurisdiction (and therefore has different laws which apply!), ‘pre-nup’ agreements are one of the biggest legal fictions which comes out of Hollywood.

What is a prenup?

‘Prenup’ is short for prenuptial agreement. A prenuptial agreement essentially sets out how the assets and property of your relationship will be divided in the event of a relationship breakdown. In Australia, prenups are referred to as ‘binding financial agreements’ (BFA) under family law legislation. They can apply to de facto or marriage relationships.

The problems with binding financial agreements…

You may have signed a prenup already, or you may be considering signing one. However, there are a number of problems with prenuptial agreements which mean that you may not be as protected as you think you are.

• The Court may set aside the agreement – and have commonly done so!
• Signing a BFA can set aside the Court’s power to make a ruling to divide property. There are a lot of risks associated with this, namely that a weaker party may be taken for a ride and not have any remedy with the court!
• The law is unclear as to the scope of independent legal advice required for you agreement to be binding.
• Currently, a party may be bound by the agreement despite the death of the other party.
• A binding financial agreement may not be needed for decades, by which point you may not even be able to prove the circumstances in which the agreement was made.

Prenups do not place you in a position of certainty and may not be fair going into the future. For these reasons, Frank Legal does not assist clients in forming binding financial arrangements and do not advise them as a course of action.  

Ending: This article is provided to the reader for general information. It is not legal advice. It was written by Andrea Spencer & Emily Graham and edited by James Frank. 

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