You will often be told that a pre-nup is not worth the paper it’s written on and that used to be true.
However, Family Law legislation now makes provision for parties to be able to enter into what are called binding financial agreements before, during or after your relationship has ended. These agreements deal with how the property of your relationship will be divided and can also make provision for the payment of spouse maintenance.
The purpose of a binding financial agreement is to oust the Court from being able to determine your matter. This means that you determine between you, how, in the event of the breakdown of your relationship, your property will be divided and whether or not spouse maintenance will be payable and if so, how much. The intention of the legislation was to enable people to settle their own financial affairs amicably (either in advance or after their relationship ended) so that the cost of litigation (both financial and emotional) could be avoided.
Because these Agreements are not ratified by a Court, there are stringent requirements for both parties to have their own legal advice prior to entering into the Agreement, to ensure the terms of the Agreement are fair. That advice has to set out the effect of the agreement on each of the parties’ rights and the advantages and disadvantages to that party of entering into the Agreement at that time. Your solicitor has to sign a certificate, which is attached to the Agreement, confirming that the advice has been provided.
While the law pursuant to financial agreements is still in its early stages and there is still the propensity for agreements to be set aside, thereby enabling the Court to determine the matter as it would, if it was otherwise asked to determine an Application, financial agreements are the best Australian law currently has to offer in terms of people coming to their own agreement without Court intervention. If drafted properly and provided none of the factors are present which would cause such an agreement to be set aside, they should hold up. This is a complex area of Family Law.