Binding Financial Agreements (Prenups)
American culture means that many people are aware of the term “Prenup”. A “prepnup” or pre nuptial agreement, is a contract entered into before a marriage that sets out what each party would receive as part of property settlement in the event the parties were to latter divorce.
A “prepnup” or pre nuptial agreement, is a way to avoid future disputes and court litigation. It is also a means of asset protection, as they are often designed to ensure that one party does not make a large claim against the assets that were owned by the other party before the relationship.
“Prepnups” or pre nuptial agreements do exist in Australia, however they are called Binding Financial Agreements.
Binding Financial Agreements are not just for married couples. They can be entered into by de facto couples as well.
Binding Financial Agreements are not just for people planning to be married. They can be entered into in a variety of circumstances, including:
- Before a marriage/ or the start of a de facto relationship. This is a traditional type of agreement used to avoid future disputes. The agreement could be designed to ensure that the assets you have accrued before the relationship don’t get caught up in a future claim if the parties separate.
- During the marriage/ or de facto relationship. Just because you are married or in a relationship does not mean it is too late to enter into a Binding Financial Agreement. You can still enter into an agreement even after you were married. These agreements are often useful to try and avoid future disputes if a separation occurs.
- After a Divorce/ or the end of a de facto relationship. Again, even if you have separated from your spouse it does not mean it is too late to enter into a Binding Financial Agreement. These agreement can be used as an alternative to Consent Orders and as a way to put in place a property settlement without the need for the court to approve the agreement.