5 Tips to Start a Prenup Discussion with your Partner

5 tips to start Prenup discussion with your Partner

While no one wants to think of separation when they are in a loving relationship, the reality is that many marriages and relationships end in separation or divorce.  It is important to take into consideration and plan for what would happen if the worst came to eventuate. 

How? By a Prenuptial Agreement (“prenup”), otherwise known as a Financial Agreement. This is a legal document which outlines how you and your partner agree for assets to be handled during the relationship and in the event of a separation. Prenups are becoming more and more common and can be an invaluable tool in the future to protect both you and your partner 

A prenup can benefit both parties, provide certainty to you both in the future, clarify needs and expectations, foster Prenup Conversationcommunication between you both and can even make your relationship stronger.

Below are some tips and strategies on how to approach the difficult topic with your partner and to help a potentially awkward and problematic conversation go as smoothly as possible.  

1.Timing of the conversation:

Like any important conversation, the timing of when you introduce and discuss the topic can be critical. Find the right time when you are both relaxedcomfortablein positive mind frame and have some private time together to discuss the future. Do not bring up the conversation if either of you is tired, stressed or there is tension between you already, as this may lead to fighting or further tension 

It is also important that the conversation is brought up and the document itself signed well before wedding dates/ commitment ceremonies or any other related events including sending out wedding invitations. This is because agreements can be set aside if one party proves they were pressured, coerced, or forced to enter into a prenup.  

When you find the right time, remember that you are introducing the topic as a conversation and NOT a demand.  You are not forcing them to do anything, nor are you dictating all the terms of the prenup to them. 

2. Work the topic into a broader conversation:

It can be helpful to bring up the conversation of a prenup within the context of a broader discussion about your finances, estate planning and your future plans as a couple.   

Discussing Prenup

You can also bring up the conversation in the context of expressing your intention to commit and have a long loving relationship with them. If that wasn’t your intention then there would be no need for the document.  It is merely a safeguard like estate planning, your Will and life insurance. You do not plan on these things happening or having to se

e the documents again after they have been signed, but it’s still important to have those documents in place if the worst happens.  

3. Be clear and straightforward – explain why you want a prenup 

You are going to have to be prepared and ready to explain your understanding of what a prenup iswhy you want one and what you are trying to achieve by having one in place.  

For example, you may have had a previous separation and gone through an ugly property settlement, you 

may want to have peace of mind as to what will happen in the future, or want to protect family inheritance and assets that have been in the family for generations or it may just be a part of your estate plan and on advice from your financial advisors/ lawyer.  

Highlight to your partner that if you did ever separate, this document could potentially save you both significant stress, money and time in the future.  It also allows you to make decisions as a couple rather than fighting about it through the court system and having a third party (the court) decide what happens to each of your assets and who keeps what.

4. Listen to your partner and reassure them 

Naturally, your partner may have a negative reaction.  Many people do not know what the document is and base their understanding of American movies, which show prenups as unromantic, mistrusting, cold and/or controlling, which is not necessarily the caseAllow your partner to have their natural reactionstime to process and empathise with their reaction and views. If you expect them to understand your viewpoint, you, in turn, need to understand and empathise with their viewpoint.

Allow time to explore your partner’s feelings and thoughts about the topic.  They are likely to ask a lot of questions, so be forthcoming with answers and, as stated above, be clear and straight forward with them.  

Ask your partner what their understanding of a prenup is. They may not know that both people can benefit from such a document. It can provide security and certainty with respect to future financial support.  They may not understand that the agreement can benefit them also. Outline those benefits to them and encourage them to do their own research on prenups or talk to a lawyer about what it is.  

5. Be collaborative  

The conversation will be much easier if you work collaboratively together to navigate any differences you have about the prenup.  Reassure them that the document is not one-sided, it exists to reflect both of your concerns. It is a consensual agreement that can be negotiated between you both. Ask them what terms would be important for them to be included in the agreement and be open to their suggestions to accommodate both of your needs.  

Selling a property after separationInheritance and Property Settlement During DivorceWhat is a Binding Financial Agreement and when can it be challenged?

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    What is a Binding Financial Agreement and when can it be challenged?

    Do you have a Binding Financial Agreement ?

    Binding Financial Agreements are contracts, usually between two people, that deal with the division of their property should their relationship breakdown. These agreements outline how the parties are to manage their financial affairs to avoid both parties from having to go to court in the event of separation.

    Due to the nature of this type of agreement, they are governed by strict legal requirements. The Family Law Act sets out these requirements, including what each party needs to disclose and how the agreement should be drafted.

    What makes a Binding Financial Agreement valid?

    Section 90G of the Family Law Act states that the following must be satisfied for a Binding Financial Agreement to be valid:

    • The Agreement must be signed by both parties;
    • Before signing the Agreement, each party must obtain independent legal advice about:
      • the effect of the Agreement on their rights; and
      • the advantages and disadvantages of entering into the Agreement.
    • The parties must be given signed statements to say that they have been given independent legal advice; and
    • Both parties must give a copy of the signed statement of independent legal advice to the other party or their lawyer.

    If the Agreement fails to meet any of these requirements, it could be ‘set aside’ (meaning deemed invalid and unenforceable) by the Family Court or Federal Circuit Court of Australia, unless it is unjust and inequitable to do so.

    Under what circumstances might a Binding Financial Agreement be challenged?

    Generally speaking, if the Agreement doesn’t comply with the Family Law Act (as set out above) or contravenes the general law governing the enforceability of contracts, the Agreement may be challenged. It is therefore critical that the document is drafted and executed correctly.

    Section 90K and 90UM of the Family Law Act list further scenarios where a court may set the Agreement aside.

    These are:

    • If there is evidence to suggest one party entered the Agreement fraudulently or failed to disclose their assets and liabilities during the time the Agreement was made;
    • If the Agreement was made solely to defraud a creditor or was made with reckless disregard to a creditor’s interest;
    • If the Agreement is unenforceable, void, or voidable under law (due to misrepresentation, mistake, duress to public policy);
    • If there has been a change in circumstances that makes it impracticable to enforce the Agreement;
    • Where there have been material changes in circumstances relating to the care, welfare and development of a child of the relationship (or a child for whom one party has responsibility) which would result in hardship if the court does not set the Agreement aside;
    • If a party acted unconscionably when making the Agreement; or
    • If the Agreement provides for a superannuation interest that cannot be split.

    When can Binding Financial Agreements be made?

    Binding Financial Agreements don’t necessarily have to be drawn up before the separation occurs. Under the Family Law Act you can enter into one:

    • Whilst contemplating marriage;
    • Whilst contemplating a de facto relationship;
    • During marriage;
    • During a de facto relationship;
    • After the breakdown of a marriage; or
    • After separation of a de facto relationship.

    If you are thinking about entering into a Binding Financial Agreement, we can help. At Cornerstone Law Offices, our lawyers will provide you with qualified advice so that you can make informed decisions.

    Call us on 1300 267 637 for a complimentary consultation (or contact us by clicking here).