Rings? Check. Dress? Check. Prenup…? We make the case for and against this most maligned of agreements.
Marriage is one of the most important contracts a person can enter in their lifetime. Yet with all the love and romance swirling around the big day, most couples forgot (or choose to ignore) the potential for a future breakup.
According to the Australian Bureau of Statistics, in 2015 there were 48,517 divorces granted in Australia. This is an increase of 2,019 (4.3%) from the 46,498 divorces granted in 2014.
While no one wants to plan to fail, failing to plan has ended many a couple inside a courtroom.
The argument for a prenup
The first thing to know is that a prenuptial agreement is not just for celebrities and billionaires worried that their future spouse is more gold digger than soul mate.
At its most basic, a prenup is designed to cover what happens to any couple’s finances and property in the event their marriage breaks down.
This might include property, investments, cash, and superannuation, as well as joint debts and assets.
As you’ll probably know, they are generally considered useful for people who enter a relationship where one person has more property or assets than the other when the relationship begins.
However, they’re also particularly useful for people entering their second marriage who have assets from the first that they wish to pass onto their children.
Also, while a prenup can be a tricky discussion point, it’s nowhere near as difficult as fighting over assets in a divorce court.
A prenup can ensure that hostilities are kept to a minimum and keep the matter out of the courts. This can be particularly important if children are involved.
The argument against a prenup
Most people don’t want a prenup because they don’t want to enter a marriage acknowledging there are caveats to their lifelong love.
This isn’t really an argument against a prenup. It’s more a way of understanding why many people don’t get them.
However, there are some circumstances where a prenup might not be suitable.
If one partner in the relationship is forcing the other to sign the agreement, rather than both entering into it of their own free will, the prenup may not hold up in court.
Similarly, if there is any reason why the court should think there might be duress on the side of one party in signing the agreement – for example, they are worried they will lose their visa if the wedding is called off – this can also nullify the agreement.
So, if you can’t get both people to willingly sign in on the agreement, there isn’t much point getting one at all.
How we can help
If you’re still unsure, come and speak to us for a more detailed conversation on the pros and cons.
Through understanding the process better, you’ll be able to make an informed decision on whether or not a prenup is right for you.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
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