Why prenups deserve a spot on your wedding to-do list
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Choosing the flowers, finalising the guest list, learning your first dance…and signing a prenup?
While there’s nothing romantic about planning for divorce, when it comes to the legal elements of marriage, talking about a prenuptial agreement (prenup) should be up there right alongside the cake and the photographer.
What exactly is a prenup?
A prenup is a legal contract that protects you and your spouse-to-be in the event that your marriage doesn’t work out. Think of it as insurance for your relationship – you hope you’ll never need it, but you’ll be grateful it’s there if you do.
If the term rings a bell, it’s probably because prenups have had a long history being linked to the rich and famous. Who can forget Charlotte York in Sex and the City going toe-to-toe with her future mother-in-law about the prenup and declaring that she’s ‘worth a million’?
But while this particular family law plot line leant more to the dramatic side, the reality is that prenups are something every couple should consider – regardless of their bank balance.
Why do I need one?
“There can be many reasons people seek to enter into a binding financial agreement. Chief among them is wealth protection or quarantining property from a property settlement, together with laying the groundwork for certainty if separation occurs,” explains Timothy Nicholls of Nicholls Anzani Family Lawyers.
“Every relationship is different, and so too, every financial agreement is different. There is a lot of flexibility in what can be included in an agreement. We have seen people forecast the division of Tupperware, to who takes the pets which exist at the time of separation, to the protection of expected inheritances. There is no fixed rule because people’s needs and what is important to them, are so unique.”
It’s also worth noting modern prenups aren’t just about protecting mansions and trust funds. Covering everything from family businesses or professional practices to inherited assets or family heirlooms, they offer practical protection for everyone.
And asking for one doesn’t mean you don’t trust your partner.
As an Accredited Specialist in Family Law, Timothy says that prenups should be considered a tool for planning a future together. While many people find the topic uncomfortable to approach, he says, “in any relationship, honesty is the best policy.”
“If the foundations are right, this shouldn’t be a ‘taboo’ topic. Binding financial agreements are surprisingly common, and a general understanding appears to be emerging that ‘those who fail to plan, plan to fail’,” he explains.
“In our view, a binding financial agreement is just good planning. People underestimate the emotional toll of negotiating your children’s arrangements and financial security in a post-separation context…It’s a binding financial agreement that maps out what will happen to your joint and separate property in the event you separate, with decisions made in a calm and thoughtful state of mind.”
Why a prenup is good for your marriage
Opening the door to honest, meaningful conversations about finances and future plans, prenups offer something invaluable: peace of mind. And while the process begins with getting on the same page about everything – from financial topics to family planning – the legalities of getting a prenup will take some time and effort.
Timothy recommends beginning the process as soon as possible, but prenups can be done at any stage of a relationship (de facto or married). While they might sound simple – after all, you’re just putting everything down on paper – Timothy warns that this is a common misconception many people have.
“They are complex and in the absence of proper skill and experienced drafting, they can have many unintended consequences,” he says.
“It is important to engage an Accredited Specialist in Family Law to advise you, knowing you will receive superior advice and representation from somebody with the requisite skills and training.”
Remember, nobody can be compelled or pressured to sign a prenup – it’s a voluntary agreement. If it sounds like the end of romance, consider this: many people with prenups have long, happy marriages and never end up using them. But they have peace of mind knowing they’re protected.
“It is important to be open and honest about your expectations and what you want the binding financial agreement to achieve, both with your partner and with your lawyer,” he says.
“Whatever that looks like, you get one chance at it, and it is important to ensure it accurately reflects the circumstances of your family and what you both want to achieve.”
You wouldn’t skip other items on your wedding to-do list, so why would you skip protecting the life you’re building together?
Visit nichollsanzani.com.au or call (02) 7259 4130 to find out more about the prenup process.
