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New Laws to Bolster Validity of Pre-Nup Agreements - Family Law

The Australian government has taken steps to bolster the validity of prenuptial agreements.

Binding Financial Agreements (colloquially known in Australia as prenuptial agreements) allow parties to set out the terms of their property division and continued financial arrangements in the event their relationship sours.

Whilst the notion of a prenuptial agreement is a highly un-romantic, many couples prefer the comfort of this certainty particularly in circumstances where the parties have already experienced a relationship breakdown (or two) or where long-held family assets are at risk.

The Family Law Act allows couples to enter into prenuptial agreements before they commence their relationship or even during their relationship. The provisions however are confusing and open to different interpretations.

Prenuptial agreements are complex documents to draft because the contingencies and exigencies in life are very difficult to predict. For example, what happens when a party falls ill, goes bankrupt or becomes unemployed, receives an inheritance or there are children born (including to other parties).

The happening of these events tend to change the original outcomes intended by the parties when they first entered into the pre-nup.

Consequently there have been a number of successful court cases which have invalidated prenuptial agreements.

Lawyers tasked with drafting prenuptial agreements often face the risk of a lawsuit against them by an unhappy party faced with the prospect of paying more or receiving less than what might have applied if there was no prenuptial agreement.

Many lawyers now refuse to draft such agreements because of these uncertainties and confusion in the law.

To restore confidence in the binding nature of prenuptial agreements the Attorney-General for Australia, George Brandis, has issued an exposure draft of amendments to the Family Law Act 1975.

These amendments should assist in removing these uncertainties so that couples can enter into private agreements and take control of property division issues without involving a court.

We have many clients with extremely complex financial affairs involving trusts, overseas property, valuable family heirlooms, and children born from other relationships. It is not unusual for couples these days to be affected by at least one or more of these complexities.

The Australian government’s intention to tighten up the laws in relation to the validity of prenuptial agreements is a welcome measure and will bring certainty to the legal minefield that stands in the way of couples wanting to plan their affairs.

An exposure draft of the proposed amendments can be found at where you can also make a submission about the changes.

For more information please contact Evan Sarinas of Sarinas Legal.

This release is not intended as legal advice and all liability is disclaimed for reliance on it.

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