Pre-Nups: The Death of Love

Pre-Nups: The Death of Love

I’ve heard them described as the ‘death of love’.  Pre-nups, or as we call them in Australia, Financial Agreements – documents which describe a financial outcome in respect of a marriage or de facto relationship if the worst happens, and things fall apart.

Financial Agreements are a part of Australian family law.  Couples are able to enter into them in anticipation of getting married or of starting a de facto relationship, or after getting married or commencing a relationship.

They are a useful tool – I recommend them in some cases because they allow parties to decide what is to happen, financially, if their relationship later breaks down.  I have written in previous blogs how they can spare businesses from being pulled into the vortex of a family law dispute between their owners (‘Using a Financial Agreement to Make Your Business’ Future Black and White’).

The fact is, Financial Agreements can help people avoid all of the time, cost and conflict that can go with Court proceedings, and set out, ‘up front’, what is to happen if, despite their best efforts, they ever part ways.  In that way, they are a sort of ‘insurance policy’, and they can really help people sidestep the Family Courts, resolve their joint finances, and more forward with life, if they ever face relationship breakdown.

But they can also be a blunt instrument too.  A tool to insulate a financially strong spouse from any claim from their future spouse.  No matter how long the marriage or relationship goes on, and no matter what life delivers along the way (children, ill-health, career changes), one spouse gets little or nothing.  Sound familiar?

Agreements which have been crafted in this way are often referred to as ‘quarantine’ Agreements – they build a wall around the wealth of one party, and don’t allow for that wall to be permeated, no matter what.  Agreements like this are a challenge.  For the person presented with the document, it is confronting to have their ‘worth’ as a life partner reduced to words on a page.  In some cases, there is even an ultimatum – sign this, or the relationship is off.  This can feel like a hopeless situation.

For family lawyers like me, that is a delicate situation.  Two people want to be in a relationship, but for one of those people, it feels like their partner is turning the relationship into a commercial deal, and a bad deal at that.  If not addressed delicately, a document designed to avoid future conflict is actually creating present conflict, and could bring about the breakdown of the relationship before it has even begun.

I see this situation from both sides – I act for lots of business owners, who seek to protect all they have built, and, understandably, for a pre-nup to be in place to insulate that business from the effect of a family law claim.  But lots of people are referred to me to help them when their financially stronger partner has presented them with a quarantine-style agreement, which makes no financial provision for them, in any situation.

There is a way of making everyone happy.  Financial Agreements don’t have to be the death of love.  Stay tuned, and I’ll tell you how.

In the next instalment of this Blog, I recommend an approach to your pre-nup which will give it the best chance of surviving scrutiny by a partner, particularly where you are looking to protect a family business from claims following relationship breakdown.

After that, in part 2, I will look at what to do if you’ve been handed a pre-nup which provides little or no outcome for you, wherever life takes your relationship.

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Dan Bottrell
Dan Bottrell 3 posts

As a lawyer, family law is all I have ever done. Straight out of law school, I knew it was the practice area for me. And it has kept me intrigued since my first day in the job. In the 15 years since then, I have helped thousands of separated couples and families through separation and divorce. They have originated from the Gold Coast, where I practice, to places around Australia, and the world.

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