More people are realising that a Binding Financial Agreement doesn’t have to be “pre-nup”—it can be entered into at any time before, during or after a marriage. Thanks to Hollywood, we’ve all heard of the trusty pre-nup, but the rise of the “post-nup” is a newish trend.
Post-nups are simply Binding Financial Agreements which are signed after you are already married. It’s an agreement which deals only with financial and related issues, such as what happens to assets and inheritances, and even pets (which are considered ‘property’). These agreements can also deal with spouse maintenance and superannuation.
What should it include?
The experts recommend that when working out the contents of your BFA you should focus on your goals as a couple and whether things like kids, new business ventures or any windfalls are likely to feature in your future. BFAs typically cover: what will happen to assets and property and debt you have now or may have in future, spousal maintenance, whether the length of the relationship will have any effect on how you divide property if the relationship fails, whether you’ll combine your income or keep it separate, and so on.
People sometimes make the mistake of thinking that just about any ‘lifestyle’ provision or clause can be added to a BFA. It can certainly be drafted, but clauses about lifestyle or conduct, such as fidelity, weight gain or even the amount of times a couple will have sex, have been proven to be unenforceable in our courts.
It takes some time to get a Binding Financial Agreement right, usually involving several lawyer meetings. Best practice means that parties should exchange financial documents for transparency reasons. Because this is not something that can be done overnight, experts warn of a ‘danger zone’ of signing a ‘pre-nup’ stle BFA within six months of a wedding. It’s in this ‘danger zone’ that duress arguments tend to succeed. If you sign a pre-nup too close to your wedding day, courts might see this as you being pressured to sign or have the wedding called off. Allowing plenty of time before your wedding day also enables you to take the time that good negotiation requires.
However, the good news is that if you didn’t get around to it before marriage, you can still sign a BFA as a post-nup to protect your assets and future earnings. Some couples might look into getting post-nups years later if problems start to arise. Or, after they’ve been married for some time, unanticipated circumstances could occur, such as receiving a large gift or inheritance, or entering into a business venture.
In Australia, post-nups are legally binding when the agreement fulfils the technical requirements of the relevant provisions of the Family Law Act 1975 and is correctly drafted. For example, if you want to enter a BFA you’re required to first obtain independent legal advice and get a Certificate of Independent Advice.
BFAs can be set aside by a court under special circumstances. Duress or “ink on the wedding dress” cases have been seen in our courts, where BFAs were set aside when partners attempted to get future spouses to sign agreements mere days before a wedding—in one case, actually on the way to the wedding venue. Other reasons a court might decide to set aside a BFA include factors such as fraud or unconscionable conduct, or because each party did not obtain independent legal advice before signing. BFAs can also be set aside if there are material changes to circumstances, such as you started a family.
Need help with a post-nup, aka “Binding Financial Agreement”? Please contact Canberra family lawyer Cristina Huesch or one of our experienced solicitors here at Alliance Legal Services on (02) 6223 2400.
Please note our blogs are not legal advice. For information on how to obtain the correct legal advice, please contact Alliance Legal Services.