Pre-Nups don’t just make good headlines; they make good sense for ordinary Australians in committed relationships.
More often, than not, our news sources are flooded with headlines pertaining to the scandalous lives of the Hollywood elite. The announcement of a Hollywood divorce can possess the newsworthy equivalent status of a world changing event. This is, invariably closely followed by that all-important question; Did they have a pre-nup? And let’s face it, it’s Hollywood, of course they do.
Whilst most of us have some vague idea of what a pre-nup is designed to do namely; protect the Hollywood magnate from having his/her partner undeservedly take all his/her fortune. What is a pre-nup in practical terms? And more importantly, are they available to ordinary Australians?
Put simply, a pre-nup, or Binding Financial Agreement (BFA) as it is known in Australia, is a private document drafted by a lawyer, that is available to:
- de facto couples
- soon to be married couples
- already married couples
The BFA states how your assets, financial resources and liabilities will be divided if your relationship breaks down.
If a relationship breaks down and a couple does not have a BFA then they could find themselves subject to the jurisdiction of the Family Courts. This effectively means that the Court will decide the division of their property after they separate. Whilst the Court is geared toward achieving a fair outcome for parties, the reality is that this process only adds a degree of uncertainty and complexity to an already difficult time.
Unlike the Hollywood elite, where relationships are arguably fit for ‘publicity's purpose', a starry eyed, loved up couple doesn’t necessarily enter a relationship with the end in mind. And whilst some may take the view that BFA’s prioritise money over commitment, this simply is not the case. Rather, a BFA is analogous to an insurance policy that is designed to provide couples with a level of autonomy and certainty over their financial future if the worst-case scenario does arise.