Whilst a prenup or prenuptial (before marriage) agreement may not be a big deal these days – one party cannot just draft an agreement and expect the other party to sign it without due consideration.
Legislation in Australia, specifically the Family Law Act sets out strict guidelines as to how a prenup or any other financial agreement should be made.
If these guidelines are not followed then it leaves the door open for the agreement to be overturned at a later date. See more at How to make sure your Financial Agreement Stands Up.
A prenup is just like any other contract
In addition to these formal requirements of the Family Law Act, it’s important to understand that your financial agreement is like any other contract and subject to the normal principles of Australian contract law. These are:
- genuine consent
Prenups in Australia can be overturned in certain circumstances
Financial agreements can be overturned if the agreement is obtained by fraud or if one or both parties engaged in conduct that was unconscionable.
- where a party signed the agreement under duress (eg threatened or actual violence),
- where one party exerted pressure over the other (eg sign this or I won’t marry you), or
- where either party did not honestly disclose the relevant facts (eg trying to hide assets or liabilities).
- where a party to the agreement entered into the agreement for the purpose of defrauding or defeating a creditor or creditors of that party (eg, signing assets over to a partner so that they are isolated from the creditors).
There are also other circumstances which affect the validity of a financial agreement which will be explored in other articles. The prenup Users Guide includes this information or see Section 90K of the Family Law Act.
The Family Law Act rules exist to protect the parties and ensure that these types of important agreements are made and executed properly.
Other Resources about Prenups in Australia
Getting your prenup done may not be high on your wedding preparation to-do list but we explain why it’s a really bad idea to leave it till the last minute and why it may put the agreement at risk.
In Part 1 we explained what an STD is and how they can occur, Part 2 looks at practical tips for avoiding them. The key tip is learning to communicate with your partner about financial matters and building trust before commingling finances.
Anna sent in this Burning question – she asks “Why do some say that they are absolutely necessary and others say that they are very easy to break? Is a good lawyer and prenup non-existent? Would love to know a bit more about prenups?” It’s a great question! Read more