Debunking Prenup Myths: What Australian Couples Really Need to Know

The fact that prenuptial agreements have become known as prenups can make them sound more friendly and less manipulative. That is good, because there is nothing to fear about the concept if you take good legal advice before you sign one. And there is no need to feel bad about instigating one if you go about it in a respectful way. A well-thought-out, watertight prenup can save a world of trouble and heartache.

The proper term for this is a binding financial agreement. The word “prenuptial” means before marriage, and this is imprecise because such an agreement can be made during or even after marriage. It doesn’t even have to be restricted to conventional marriage, either. Increasingly today, couples are entering into civil partnerships known as de facto relationships, which are marriages in all but name.

However, it is the typical prenup that we’re looking at here, and there are a number of preconceptions that need to be addressed.

Prenups Are Just for the Rich and Famous

It’s easy to see how this view came about. Wealthy people have more money and assets to worry about than most. They are also more likely to be in the spotlight, so we don’t hear about the legal affairs of the people next door; when we hear about prenups, it often involves a celebrity, which nowadays includes people who have made their fortune in the tech industry.

Some would say it is noticeable that rich and famous men often have a wife who is more beautiful than they are, and who wouldn’t have been interested in them were it not for their wealth. The same could be said about wealthy women, of course, but the traditional image of the gold digger is the glamorous young woman with an unexceptional-looking and possibly much older husband. This is just the way of the world, and if the couple are happy, who is to say it’s wrong?

What would be wrong is if the glamorous party goes into the relationship thinking about what they’re going to come out of it with when it inevitably fails. This is not just a modern phenomenon. In societies where the dowry system has been in operation for thousands of years, women from wealthy families have gone into marriages with powerful men on the strength, not of their beauty, but of the money they could bring with them. In such circumstances, it would be the woman who sought legal protection so that if the marriage failed, they would not be left with nothing.

That is why we tend to think of the prenup as the province of the wealthy. However, if we look at it from the perspective of ordinary people trying to make something of themselves, they may choose to marry someone who doesn’t share their drive and ambition or perhaps their business acumen. The chosen partner may have skeletons in their closet, such as substantial debts, and while love can see a way past all that, when the ardour has cooled and bald reality becomes apparent, people tend to feel a lot less generous. This is when the law, often derided for its lack of feeling, can help people greatly.

Even if you don’t have an awful lot to protect, it can make sense to make it clear what will and will not be available in the event of separation or divorce. There is plenty of negotiation in the process of building a relationship—from where you will live to whether you will have children, and if so, how many. Introducing the idea of a prenup is therefore not the only potential stumbling block.

Prenups Are Insulting and Punitive

Prenups are, in fact, logical and can be very reasonable, but they can seem to contravene the spirit of the relationship. This is something each couple must work out between themselves. If the very mention of a binding financial agreement raises hackles and causes animosity and a lack of trust, perhaps the relationship wasn’t ideal in the first place.

In any case, prenups can be negotiable, and it is advisable to run yours past your family lawyer before signing it. Perhaps it can be softened in some way so you don’t feel resentful that you’re not trusted as you would like to be. Your family lawyer will attempt to swing it more in your favour.

Prenups Are Expensive

Binding financial agreements are often straightforward, so they don’t cost an inordinate amount to the individual setting one up. The more money involved, the greater the need and the potential saving. But even at the more modest end of the scale, unless the stipulations are exceptionally complicated, the document can be drawn up fairly quickly and easily.

For the partner being asked to sign a prenup, there will be the cost of running it past their own lawyer and perhaps having them attempt to rebalance it, but that shouldn’t be too expensive.

Once a Prenup Is Signed, It Cannot Be Revoked

Although any binding financial agreement is, as the term suggests, binding, it can be renegotiated at any stage. As mentioned earlier, a similar agreement can be drawn up after the marriage or legal commencement of the relationship. This can happen if the circumstances of one or both partners change—for instance, if one enjoys significant financial success with no contribution from the other. Again, we’re in the territory of rational and reasonable discussion, which depends on the personalities involved.

If one partner is unhappy about potential financial implications in the event of a business failure, they can take legal steps to insulate themselves against that possibility. Binding financial agreements exist to protect people.

Another potential scenario is if something comes to light as regards the financial circumstances of one partner. If, for instance, a source of income or assets—such as property ownership—were not disclosed at the time of drawing up the agreement, that can put a different complexion on the whole thing, and a court may decide the agreement is invalid. Prenups are legally binding, but under Australian law, they can be challenged.

Prenups Are for People Who Have Been Married Before

Anyone with a previous marriage behind them will have learnt certain lessons, and if they have been the victim of an injustice, this may persuade them to do things differently next time. However, those entering into a marriage for the first time are just as entitled to draw up a prenup if they wish.

In Summary: Prenups Can Be a Very Good Idea

Business is business, and it doesn’t cease to be so when romance enters the picture. Bringing up the idea of a prenup or binding financial agreement needs to be done carefully and respectfully, but they can make a lot of sense, and the person being asked to sign one need not feel disadvantaged. They have the option of working with a family lawyer to amend or restructure it. If their own circumstances change greatly for the better, they may find at some stage they want to draw up one of their own.