A prenuptial agreement is a binding financial agreement between two individuals that records their assets, liabilities and financial resources prior to marriage. The agreement states how these assets will be divided between the two parties in the event of a divorce.
Suggesting a prenup can be an awkward conversation with your partner, but creating a prenuptial agreement ensures the assets and resources you have worked hard for are protected if you divorce, and ensures your future self and those dependent on you are provided for and protected.
For a prenup to be legally enforceable, certain strict criteria must be met. These include:
- The agreement must be signed by both parties in the presence of a suitable witness, usually the parties’ legal representative;
- Both parties must have independent legal advice prior to entering into the agreement. Parties cannot share a lawyer or get advice from the same lawyer under any circumstance;
- Those providing independent legal advice must sign a declaration that they have done so;
- The parties must have entered into the agreement without duress, coercion or undue influence;
- The agreement should detail a complete disclosure of both parties’ financial positions; and
- The agreement must be fair for both parties.
If any of these circumstances exist, the prenuptial agreement can be challenged in the Family Court and rendered unenforceable.
You can only challenge or change your prenuptial agreement if you prove one of the following:
- The prenuptial agreement was signed under fraudulent circumstances;
- The prenuptial agreement isn’t practical or convenient to fulfil; or
- One party was unfair or unethical when creating the prenuptial agreement.
It is important to sign your prenup well ahead of your wedding ceremony. This will reduce the chance of the court finding one party to have entered the agreement under duress, coercion or undue influence. Signing the agreement as far away from your wedding ceremony as possible is best (recommended no less than 60 days before the ceremony). By signing early, both parties also have more time to consider the details of the prenup before getting married.
If you are considering whether or not to create a prenuptial agreement, No Lawyers’ Family Law Resources can give you the confidence to make decisions that are right for you.