11 Apr Prenup/Postnup/BFA/ Financial Agreement – why so many options?
They’re actually more or less the same thing, just entered at different stages of a relationship.
Sure, a prenup is as it sounds, a document signed by an engaged couple before their wedding.
However, the documents are slightly different in form and content.
De facto and engaged/married couples alike, including same sex since recent legislative amendments, can enter “prenup” style documents.
There are two distinct documents they may enter, depending on whether the intention of the document is to divide assets accumulated throughout a relationship at the end of a relationship or to set out a mechanism by which the assets of the relationship are to be divided upon separation (if the couple ever separate).
Financial Agreements pursuant to the Family Law Act continue to apply in the event one party predeceases the other[1]. This means that any prenup is enforceable even if separation occurs as a result of one party dying and any terms not yet complied with under a Financial Agreement remain binding in the event of death – in other words the Estate of the deceased party will be legally obligated to comply with the terms of the Financial Agreement.
Unless it is a true prenuptial agreement (or the de facto equivalent) that the couple is looking to enter, there is an alternative process that is a much more cost-effective process for the division of assets after separation.
A separated couple, married or de facto, have the option of
dividing their assets by Court Order on an Application to the Family Court for
Consent Orders. This is a much easier task and there is no requirement that
both parties receive legal advice, as is the case for Binding Financial
Agreements.
[1] Family Law Act 1975 – s90H for married couples and s90UK for de facto couples provides that where a Financial Agreement is binding on the parties, the terms of the Agreement will continue to apply on the death of one of the parties.