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Pre-Nuptial Agreements

Gordon Ainger, Accredited Family Law Specialist shares some insight.

Most people are aware of the ability to enter into pre-nuptial agreements, and whilst there have been some "spanners thrown in the works" by recent Family Court decisions, they remain an important tool in asset protection and planning.

Family law financial agreements can be made either before marriage or before starting a relationship, or during the marriage or relationship.  The agreement can provide for how to deal with each party's property after separation, or for the maintenance of the parties either during the relationship or after separation.  Parties can use the agreements to decide to contract out of the property and maintenance provisions of the Family Law Act and to substitute a different means of distributing matrimonial property upon separation.

Ultimately, a financial agreement can only be as good as the parties want it to be.  Often little thought is put into how the agreement is to operate at the relevant time  -  i.e. at and after separation.  The questions need to be asked - What do the parties to the agreement anticipate their life will be like in 5 years time?  in 10 years?  In 20 years?   It is at that time that the agreement may become operative and accordingly serious thought needs to be given to the projected circumstances of the parties at the time the agreement is proposed to become operative, i.e., at that unknown future date.

Unsurprisingly, there has been an increasing amount of litigation surrounding pre-nuptial agreements.  People aggrieved by settlements they had in the past agreed to accept have litigated, sometimes successfully, sometimes unsuccessfully, for the agreements to be overturned.  Reasons for the successful claims have included:

  • Failure to comply strictly with the procedural requirements laid out in the Family Law Act
  • Amending already concluded agreements
  • Solicitors undertaking the work urgently or in haste and not taking adequate notes
  • Confusion about the meaning and requirements of the legislation (which has changed over time)
  • Parties signing different counterparts purporting to be the one agreement
  • One party signing before, one party signing after, the marriage ceremony
  • Failure to identify precisely what the agreement is intended to do

These kinds of mistakes can occur when practitioners underestimate the task actually required to draft or advise on a financial agreement, and when parties underestimate the technical and legal difficulties associated with the exercise.  Not all challenges to the agreements are successful, and well considered, well drafted agreements may stand up to challenge.

Entering into a financial agreement is not a decision to be taken lightly.  There is no "one size fits all" agreement that will cover the multitude of personal circumstances that people find themselves in.  Failure to consider properly all these possibilities that might be encountered during the lifetime of the agreement, such as the care of children, unexpected unemployment, illness, changes in the holding structures of assets, can make these agreements increasingly irrelevant as time passes.

Please contact Gordon Ainger, Accredited Family Law Specialist at in the event you have any queries relating to this content or Family Law matters generally.

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