Prenuptial Agreements

A “Pre-nup” is a type of BFA (see Binding Financial Agreements).

Historically, a prenuptial agreement was not regarded as being “worth the paper it was written on”. However, with the introduction of binding financial agreements, pre-nups are becoming increasingly popular, and recent research indicates that close to 15% of engaged couples are now signing prenuptial BFA’s. The legal requirements for a prenuptial BFA are the same for an engaged couple as they are for a de facto or same sex couple who are planning to begin living together.

Such an agreement might be particularly attractive to someone who is getting married for the second time or who, having children of a previous relationship, wishes to ensure that certain assets are “quarantined”, or else retained for the benefit of those children, in the event that, despite his or her best intentions, the second marriage fails.

At DFL, we have specialist family lawyers who have the experience and expertise to advise you as to whether a pre-nup is appropriate for you; and if you have been presented with a pre-nup by your partner, we will carefully analyse the document and advise you as to the possible pitfalls of proceeding. Great care must be taken in the drafting of a document that may be required to stay in place for 5, 10 or even 20 years, and will have to provide for a variety of contingencies, such as:

• the birth of children;

• the loss of employment by one party; or

• the receipt of an inheritance.

It may very well be that we advise you that it will be safer for you to enter into such an agreement, rather than not. However, it is probably fair to say that there is no such thing as a fully watertight pre-nup. This is because there are certain limited circumstances in which one party to a pre-nup can apply to a Court to vary or set aside its terms, following relationship breakdown. Situations in which such applications have been successful include where, at the time that the pre-nup was entered into, one party failed to disclose to the other a material matter about his or her financial situation; or where, during the relationship, there has been an exceptional change of circumstances affecting a child of the relationship, and it will cause hardship to the parent if the pre-nup were to be upheld.

In summary, these are technical documents, that are not suitable for everyone. They require skill in their drafting and great foresight in making sure that the agreement deals with all situations that may arise in a long-term relationship.