52,498 good reasons to consider a pre-nup
Analaura Luna
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Over the last few weeks, weddings have been a hot topic of discussion. But there’s one important part of entering into a long-term relationship that no one’s talking about: the pros and cons of getting a pre-nup.
Wedding fever has hit the world and the upcoming royal nuptials are being dissected bit by bit – who’ll be there, who won’t be there, what the bride will wear, whose family will embarrass whose first, and whether the new bride’s father-in-law-to-be will deliver one of the jaw-dropping gaffes he’s become renowned for.
But one thing that isn’t being discussed with fervour is the possibility of a pre-nup. Despite becoming more common, especially with so many people remarrying after divorce, pre-nups are still considered a taboo topic, hailed by many as being an insurance policy against the marriage failing.
But if we’re going to be realistic about it, the truth is that many marriages don’t last and it’s pretty easy to imagine that the vast majority of the 52,498 couples who filed for divorce with the Federal Magistrates Court and Family Court of WA in the 2009/2010 financial year didn’t think their marriage would end when they were saying ‘I do’. It’s also fair to say that most people would prefer not to go through a bitter court battle and wind up with a divorce property settlement they’re not happy with – and this is something that an effective BFA may prevent.
There are many arguments for and against getting a BFA – one of the ‘cons’ that people are often concerned about that they kill the emotion of the relationship. But the reality is that by taking money out of the equation, a BFA can provide the security of knowing that you both really are in the relationship for the right reasons and can make a marriage even stronger. BFAs are about ensuring financial security and stability, but the truth is that they’re not for everyone. If you’re wondering whether a BFA could be for you, have a think about the following things:
Work out if it’s worth it
With so many Australians marrying – and remarrying – later in life, we’re bringing substantially more assets to relationships as well and it’s not unreasonable to want to protect yourself financially if the relationship should end. If you’re bringing considerably more assets to the marriage than your spouse-to-be, know that you’ll be the financially ‘weaker’ partner because you’ll be taking primary responsibility for caring for the children, or have concerns over your partner’s credit, spending or gambling habits, it might be worth considering a BFA.
Do it for the kids
It’s no secret that a divorce with children involved is hard. In 2008, 45,000 children experienced their parents’ divorce in Australia – that’s a lot of kids going through a lot of turmoil. If you have children from previous relationships and want to secure any future inheritances that may come to them from your relatives, want to protect the financial rights of all children in your relationship (which can become especially complicated when there are children from previous relationships as well as children of your relationship), or just want to spare the kids from having to go through the uncertainty and devastation of a property battle, a BFA could help.
Get independent advice
BFAs (as the name suggests) are binding. Once you’ve signed one, that’s pretty much it, as even the courts have difficulty overturning them except in very select circumstances. It’s critical that you get independent legal and financial advice before signing a BFA – and that means not using the same advisers as your partner! Once you’ve signed it you’ve agreed to it, and are confirming that you understand it totally. So, make sure all your questions are settled before you sign the dotted line.
But what if you’re not a newlywed? What if you’re already married – or have no intention of getting married at all, and just want to live together? The great news is that BFAs are really flexible – and it’s never too late to get one. BFAs can be made at any time before, during or even after a relationship … and they really can help prevent a financial disaster of royal proportions if you decide to go your separate ways!
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Tags: divorce in Australia, divorce property, divorce with children
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Wilson Luna is an author, wealth adviser and founder of Your Family Your Money. Your Family Your Money’s goal is to simplify traditionally complex financial strategies, demystify financial jargon and debunk common financial myths, becoming every family’s first stop for financial advice, information and inspiration.
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