Pre-Nuptial Agreements
Written 30 August 2012
It is becoming increasingly common for clients to enter Pre-Nuptial Agreements (known to lawyers as Binding Financial Agreements) prior to or during marriage to protect their assets.
Common fact scenarios that necessitate such an agreement include:-
- One party’s superior financial position; or
- The parties have been married previously and wish to protect their children’s inheritance; or
- One party will inherit in the future and wishes to “quarantine” these monies from any claim of property settlement.
If a Pre-Nuptial Agreement is not in place, the initial contributions of one party, although far superior to the other party are only one factor that the court will consider when making an order.
Initial contributions may be given more weight by the court where the relationship has been short and there are no children. The initial contributions will still form part of the pool of property available for distribution unless a Pre-Nuptial Agreement is in place.
A Pre-Nuptial Agreement can deal with property existing at the commencement of the relationship, accumulated during the relationship, inheritances, spousal maintenance, and the death of a party.
Common scenarios that may result in the Pre-Nuptial Agreement being held by a court to be non-binding include:
- The agreement was signed too close to the wedding day. There is no time frame set by the legislation as to when the agreement can be signed by the parties, but the agreement should not be entered in haste. The agreement may be held not to be binding if entered too close to the wedding especially if one party was under pressure. For instance, if one party was from overseas and needed the wedding to take place due to visa restrictions, and was threatened close to the wedding that the wedding would not take place if the agreement was not signed, this has been held by the court as being grounds to set aside the agreement.
- There was unequal bargaining power between the parties. An agreement can be set aside if the court finds that there has been duress or undue influence. The most common situation relates to immigration issues.
- There was fraud on the part of one of the parties.