The general rule applying to property division between couples is that once you have been in a qualifying relationship (de facto, marriage or civil union) for three years or more, all relationship property should be equally divided in the event of separation. Property that is not classified as relationship property is the separate property of the owner and not subject to the presumption of equal sharing.
Some couples are happy for the general rule to apply. Those that are not can opt-out of the general rule by signing a Contracting Out Agreement — commonly referred to as a “prenup”, this type of agreement can cover all property owned by a couple or only some of their property.
A prenup allows couples to record what they think is a fair division of their relationship property having regard to the circumstances of their relationship.
There are lots of benefits to a prenup; here are some key reasons why you should consider getting a prenup:
A prenuptial agreement can assist in providing protection of assets for any children of a previous relationship in the event of death.
A prenup can protect assets owned before the relationship and keep them as separate property, as well as assets acquired during the relationship.
Under the Property (Relationships) Act 1976, relationship debt (which does not necessarily have to be in joint names) is also shared equally. A prenup can protect partners to a relationship from each other’s debt.
If you’re looking to maintain financial expectations between you and your partner, during your relationship and/or in the event your relationship ends, a prenup can help you confirm and manage these appropriately.
In the event of separation, a prenup can help make the separation process more straightforward, both financially and emotionally, for all parties involved. An agreement can provide certainty throughout your relationship and in the event of separation or death.
How to get a prenup?
You can sign a prenup at any time during a relationship. However, we recommend entering into an agreement of this nature before the relationship property laws under the Act begin to apply. For an agreement to be binding and enforceable, it must be in writing and each party needs an independent lawyer to provide them with advice.
While it can often be an awkward topic to raise with a partner, we’ve found that having honest and open conversations about finances early in a relationship can be hugely beneficial.
FOR MORE INFORMATION
If you consider getting a prenup (contracting out agreement), we recommend talking to a lawyer early to ensure that you are well-informed of your options and your agreement is as watertight as possible.
Feel free to contact one of our family lawyers to discuss your situation and book an initial consultation:
- Debbie Dunbar | 04 495 9940 | firstname.lastname@example.org
- Maretta Twentyman | 04 495 8918 | email@example.com
- Anna Chapman | 04 495 8905 | firstname.lastname@example.org
- David Abricossow | 04 886 2641 | email@example.com
- Annabel Sanders | 04 495 8927 | firstname.lastname@example.org
- Olivia Lynch |07 349 7484 | email@example.com
- Claudia Leathart | 04 886 2665 | firstname.lastname@example.org
- Louise Curran | 04 495 8915 | email@example.com
- Jennah Terlesk | 07 808 1700 | firstname.lastname@example.org