Postnuptial Agreements: Protecting Love, Assets, and Futures

It is common for couples to make such post-marriage agreements to help resolve issues in their marriage caused by disagreements over finances, assets, children, etc. Many couples will be surprised to learn that making a postnuptial agreement can actually promote harmony by helping one or both of the parties to feel more secure in the relationship.

What is a Postnuptial Agreement?

In short, a postnuptial agreement is basically a prenuptial agreement, only you sign the dotted line after you have married. So, yes, it's a contract in which you and your spouse will decide how to split up your assets in the event of a divorce.

Reasons a Couple Might Consider Entering a Postnuptial Agreement

There are several reasons why couples enter this binding financial agreement throughout a marriage or relationship rather than before.

Circumstances can change throughout a marriage, particularly related to finance. If a couple already has a prenuptial agreement, they may enter a postnuptial agreement simply for the sake of having up-to-date documentation.
If there has been a drastic change in a couple’s financial situation, then it is a good idea to enter a binding financial agreement. For instance, a spouse that inherits a large sum of money or a valuable heirloom during a marriage may revoke an existing prenuptial agreement and then create a brand-new financial agreement in case of separation or death. This postnuptial agreement can help keep these assets set aside just for that spouse.
If one spouse is part of a family business and that business wishes to protect ownership and assets from the other spouse, a postnuptial agreement can be used to guarantee control over the ownership of the business in the event of the couple’s divorce or the spouse’s death.
Postnups are sometimes considered in mediation where there has been a temporary breakdown in the marriage, or the parties wish to establish a degree of certainty as to the financial outcome of any permanent breakdown.
For those entering a second or third marriage with children from previous relationships or marriages, a postnuptial agreement helps to ensure that their assets go to their children.
Didn't get around to making a Prenup? It's hardly the most romantic subject and it is understandable if a couple finds it difficult to discuss breaking up when life together is just beginning. Sometimes couples just don't get around to it, or are unable to complete a prenup before the wedding takes place. So, a postnuptial agreement is a logical follow-up.

What Should a Postnuptial Agreement Include?

A typical postnuptial agreement in Australia could include the following:

Assets and debts;
Joint and personally-owned belongings and assets;
Spousal maintenance;
Expectations of any gifts/inheritances;
Insurance coverage;
How any property will be split; and
What is covered in each party’s Will in the event of death.

Is a Postnuptial Agreement Legally Binding?

If a postnuptial agreement (Binding Financial Agreement) correctly complies with the appropriate provisions of the Family Law Act 1975 (“the Act”), the document will legally bind the signatories to the agreed procedure set out in the document. Generally speaking, a valid and legally binding agreement will contain the following elements:

The agreement must be voluntary. Neither party should feel pressured into entering into the agreement;
Both parties need to be separately and independently advised by a lawyer;
Both parties must disclose their financial assets and liabilities in a full, frank and honest manner;
There should be adequate time to reflect and consider the terms that are proposed in the postnuptial agreement, and neither party should feel pressured by time to sign the agreement;
Whilst there is no requirement for the agreement to be fair, each party must have full knowledge of one’s rights under the Act and freely consent, without any coercion. A statement in the Agreement as to why the parties have agreed to vary from the Act, would be appropriate to include in the Agreement.
Parties also should recognise that the matrimonial circumstances may change and that the revocation of an Agreement and the need for a new Agreement may occur over time.

During these uncertain times, if you need help to prepare a family financial agreement (prenups) in Sydney, NSW, Jeffrey is available by mobile phone.

Phone: 0419 233 670 Email: [email protected]