Recently I had the pleasure of representing Coleman Greig as a participant on SBS’ Insight program, where I was given the opportunity to discuss Binding Financial Agreements (or, to use the vernacular, ‘Pre-Nups’). First and foremost, I would strongly encourage you to watch the show, although to save readers some time I thought I would use this opportunity to give my 5 key takeaways from the show, why to implement them, and how to go about doing so in an effective manner:
Less is more:
One of the people on the show had taken steps to include everything in their Pre-Nup, down to the Tupperware. Whilst I understand the cost of Tupperware (if not the attachment to it), I think that the less you include in a Pre-Nup, the less likely it is to be set aside in the case of a relationship breakdown. Most people simply want to protect one asset (usually a house) that they have brought into the relationship. If you stick to the principle of “less is more”, rather than resorting to crystal ball gazing to sort out what will happen in the future, you are less likely to run into trouble.
Have the conversation:
Most people on the program who had entered into Binding Financial Agreements had ensured that the conversation had taken place in a mature and commercial way, well before actually signing the agreement. This mature and proactive way of dealing with the issue helps to avoid any element of duress, and will also put you in good stead with regard to knowing where the other person is coming from, and whether an agreement is right for both parties.
One size does not fit all:
There were varying views in the audience as to whether a Pre-Nup should be entered into, and whether they were a good idea, which makes clear that they truly are an individual choice. Whilst I reflected on my personal circumstances on the show, and concluded that a Binding Financial Agreement is not right for me, this does not mean that they are not a useful tool to protect assets being brought into a relationship.
In the past, Pre-Nups were more often than not the domain of wealthy older people protecting their assets going into a second marriage – although this is changing. With the inability of young people to enter the property market, more and more parents are assisting their children, leading to these types of agreements being entered into by young people, often at the instigation of their parents.
Most agreements, when put together effectively, will specifically state that they will still have effect whether or not the couple in question have children. However, having children manifestly changes your financial circumstances, so real thought does need to be given as to what the agreement should say about children, whether it should still have effect, or whether allowances would need to be made (usually monetary) based on whether there are children, and if so, how many.
As always, getting the right advice about Pre-Nups is crucial. To find out more, please read our Plain English Guide to Pre-Nuptial and Pre Relationship Financial Agreements, or get in touch with one of our Accredited Family Law Specialists.