Nobody starts their marriage expecting to get divorced one day. But, unfortunately, marriages, like many other relationships, can come to an end.
A prenuptial agreement is designed to protect your assets, financial rights, protect you from debt and secure your property rights, before you marry.
Prenups can also save you from a long and costly divorce process, should the worst happen.
A survey earlier this year by ME bank found that 74 per cent of Aussies thought a prenup was fair… but only 17 per cent actually had one in place.
In Australia, a prenup is known in the court system as a Binding Financial Agreement. It sets out how assets and other resources will be divided in the event of a relationship breakdown.
The couple must each be represented by independent lawyers before entering into one and given appropriate legal advice that outlines what the advantages and disadvantages of signing the agreement will be. The agreement must also be signed by the lawyers acknowledging that they have provided that advice.
There are pros and cons to a prenup: it means that you can protect your assets in the event of a divorce. But if you are the party who gets the “bad deal” in the prenup and circumstances change in the relationship, there won’t be much you can do to remedy it after the divorce.
Prenups can also be used as a form of financial abuse.
It’s important to get legal advice before signing one that takes your own circumstances into account and to weigh up the pros and cons.