With the reality that one third of marriages end up in divorce or separation in Australia, it is important for couples to prepare for situations that might stand a chance of happening. Indeed, preparing a prenuptial agreement can be the most unromantic step of a relationship, but it can help resolve bitter disagreements moving forward. A prenupial agreement (prenup) is basically a legally binding agreement that specifies how a couple will split their assets if they end up in divorce.
To design a prenup that will work for you and your partner and will stand the test of time, keep the following factors in mind.
Design the prenup during the engagement stage
A critical element of an effective prenup is when the agreement was actually written. Indeed, it can be argued in court that the agreement was signed under duress if it was prepared too close or after the wedding date.
Most effective prenups are written during the engagement stage, where the couple is in the early stages of preparing for marriage. This is considered a time when both parties are "sober" and are making the best decisions for themselves and the upcoming marriage. When you're ready to draft up the prenup, contact a local family lawyer to ensure everything goes smoothly.
A common mistake most couples make is to hide things from each other. A husband may try to beef up his assets to impress his future wife, while the wife may also misrepresent her assets to appear more financially stable. There is also the case where couples hide assets that they have so they may not be considered for distribution in the prenup. Being dishonest can cause problems with the implementation of the legal agreement and some of the provisions in the document can be argued against in court.
To ensure that the prenup is as strong as possible, be transparent as much as you can. You should also take time to assess the value of assets such as homes and insurance policies that may be more complicated to value.
Make sure the agreement can hold up in court
There are certain things that couples may include in the prenup that don't necessarily hold their weight in court. For example, issues regarding child custody, domestic violence, and other more complex areas cannot be predetermined in a prenuptial agreement. These issues will be resolved by a judge on a case-by-case basis.