Binding Financial Agreements: Pre Nups
Congratulations you have just announced your engagement. You are a young executive in a large company deriving a substantial annual income. You have developed a portfolio of assets including shares and real estate. Your fiancé is on the other hand less affluent but that is immaterial as you are clearly in love. Love conquers all and you cannot conceive of the marriage breaking down
irretrievably and the subsequent divorce with a property division.
Wedded bliss falls flat
Wake up girl. Your marriage is now dead. Fast forward in your thoughts to the court allocating a percentage of your hard earned income and assets to your husband in a bitterly contested court battle. Rules and regulations will determine the inevitable allocation of property and assignment of the pool of assets and liabilities.
Essentially the court considers the Family Law Act to evaluate who gets what in the wash up. The first step will be to identify the assets and liabilities and this will include your nest egg of superannuation entitlements. The second step will be to look at the contributions, financial and non financial, that each of you has made to the acquisition, maintenance and improvement of these assets.
The court will carve up the asset pool and you will not like this cut.
Think about the future now. Talk to me to advise you on asset protection by way of a binding financial agreement (also called a pre nup in the old terminology). It is not difficult. You can use such an agreement to first and subsequent marriages. You will have the peace of mind to work on the emotional parts of your marriage.