Is It Possible for a De Facto Couple to Get a Prenup in Australia?
A prenup, or Binding Financial Agreement (BFA) as it’s formally known in Australia, isn’t exclusive to married couples.
De facto couples can also enter into financial agreements to sort out financial matters and asset division in case the relationship ends.
The process involves both parties disclosing their financial situations, discussing asset division, and seeking independent legal advice.
Once the agreement is drafted and signed, it becomes legally binding, provided it meets the specific legal criteria.
What is a Prenuptial Agreement?
A prenuptial agreement, or ‘Binding Financial Agreement’ as it’s known in Australia, is a legally binding contract between two individuals planning to enter into a marriage or de facto relationship.
It outlines what happens to each party’s assets and liabilities should the relationship end.
🔑 Key Takeaway: A prenup is not a sign of mistrust; it’s more like an insurance policy for your relationship.
Why Consider a Prenuptial Agreement in a De Facto Relationship?
De facto relationships are increasingly common, and Australian law doesn’t discriminate between married and non-married couples when it comes to financial matters.
A prenup can serve as a financial planning tool, offering both parties peace of mind and clarity.
🔑 Key Takeaway: De facto or not, a prenup can offer the same level of financial security and peace of mind as it does for married couples.
What Can a Prenup Cover?
A prenup can cover a wide range of assets and liabilities, from real estate and superannuation to future inheritances and even pet care.
It can also include provisions for child support if children are part of the equation.
🔑 Key Takeaway: A well-crafted prenup can be comprehensive, covering everything from property to pets.
For a prenup to be legally binding in Australia, it must meet specific criteria, including both parties receiving independent legal advice.
Failure to meet these requirements could result in the agreement being overturned by the Federal Circuit and Family Court of Australia (FCFCA).
🔑 Key Takeaway: Dot your i’s and cross your t’s; legal advice is a must to ensure your prenup is watertight.
Pros and Cons
While a prenup can act as a safety net, it’s not without its drawbacks.
For instance, the court can set aside a prenup if it’s found to be unjust or if there has been fraud or a significant change in circumstances.
🔑 Key Takeaway: A prenup is a strong layer of protection, but it’s not bulletproof. Always consult with a legal expert.
How We Can Provide Assistance
We recently had the privilege of assisting a male entrepreneur involved in a de facto relationship who approached us with inquiries about setting up a prenuptial agreement.
The client was keen on safeguarding his individual assets and setting clear financial boundaries.
After an initial consultation to understand his unique circumstances and objectives, we provided him with a comprehensive overview of how Binding Financial Agreements (BFAs) work under Australian law.
Our team then guided the client through the process of asset disclosure, ensuring complete transparency between both parties.
We discussed the various elements that could be included in the prenup, such as property, superannuation, and even future inheritances.
Given that Australian law requires both parties to seek independent legal advice for a prenup to be legally binding, we arranged for him to consult with another legal practitioner to review the drafted agreement.
This step is crucial to ensure that the agreement is just and equitable for both parties involved.
We then finalised the agreement, ensuring it complied with sections 90UA-90UN of the Family Law Act 1975, which specifically apply to de facto couples.
Seek Independent Legal Advice
A prenuptial agreement offers a sensible approach to safeguarding your assets and setting clear financial expectations in a relationship.
One crucial step in this process is seeking independent legal advice.
Not only does it ensure that the agreement is legally binding, but it also provides an extra layer of protection and understanding for both parties involved.