Do I Need a Prenup? Here’s Why They’re No Longer Just for the Super Wealthy
When you’re happy and in love, you don’t want to think about your relationship breaking down. But, being the independent bad ass boss women that we are, we need to make sure that our finances and beloved belongings are secured, in case of an unforeseen relationship breakdown.
Have you ever thought of a prenup? Yeah, neither. But if you’re in a committed relationship and own stuff together, a prenup is something you should be thinking about — regardless of your wealth.
In case you have absolutely no idea what we’re talking about, a prenup (short for Prenuptial Agreement or Binding Financial Agreement as it’s legally called in Australia) provides the framework for how financial issues will be handled if a couple decide to separate or divorce. Things like property, income, superannuation, businesses and inheritances owned by either party before the marriage or acquired during the marriage can be covered in a prenup.
“You don’t need to be cashed up to benefit from entering into a prenup, anyone can get a prenup,” Charlotte Monaghan, Practice Leader at Australian Family Lawyers, tells POPSUGAR Australia.
“Even if you don’t consider yourself wealthy, you might still have assets you’d like to protect (like a pet or a car), or you may have an expectation of receiving assets in the future that you would like to protect.”
Alternatively, if you’ve inherited a family business or large property that you want to make sure stays in the family, a prenup can help with that too.
What Are the Benefits of Getting a Prenup?
Here are four of the best things about getting a prenup, according to Monaghan:
Prenups Promote Transparency
A prenup requires disclosure of your assets and financial circumstances. Doing this as you embark on a marriage or de facto relationship sets you up, as a couple, for open and transparent ongoing conversations about finances (including who owns any existing debt or debt incurred in the relationship) moving forward.
It Does Your Property Settlement for You
If you jointly own property and your relationship breaks down, you don’t need to worry about going through the formalities of documenting a property settlement at the time of separation. You’ve done it in advance in your prenup which will save yourself the cost, time and stress that may come with having to resort to the court system to resolve a property settlement in the event of a relationship breakdown.
They’re Cost Effective
Some may view the cost of a prenup as a con, but when you compare that to the possible court costs and legal fees that can be incurred in a separation or divorce, prenups are much more cost effective. A prenup should be viewed in a similar way to an insurance policy. While you do not receive the benefit of an insurance policy immediately, if something goes wrong (in this case a relationship breakdown) you are protected and will save yourself potentially significant costs.
They Protect Everything, Not Just Cash
A prenup allows you to protect what’s important to you and your future assets. Even if you don’t have a lot of money now, you may still have valued assets you want to protect. A prenup can also protect gifts you may receive in the future or assets you will acquire (including inheritances and other windfalls) to ensure that you retain them as part of a financial settlement.
What Do Most People Ask for In a Prenup?
Here are some of the basic and common things asked for in a prenup:
- Protecting current wealth.
- Specific items like treasured assets, including beloved pets, heirlooms or valuable gifts from your partner.
- Future inheritance, or other lump sum of money you may be expecting like a compensation payment or redundancy.
- What a property settlement will look like if you do separate down the track, particularly if you’ve suffered financially from a previous relationship.
How Do I Talk to My Partner About a Prenup?
If you’re reading through this article and thinking “damn, I should look into this” but don’t know how to bring the conversation up with bae, there are some steps you can take.
“Having dealt with many prenup discussions with couples, my top tip for broaching and discussing the subject is to approach this topic the same as you would with any other difficult subjects in your relationship, like major financial decisions or organising your will,” Monaghan says.
“Pick your moment with your partner/spouse and be prepared for you to have differing views, but also remember that a prenup is intended to benefit both parties. If you think your partner may react in a not so positive manner, make sure you’re not bringing up the subject for the first time when they’re distracted or having a bad day.”
Make sure to also have a think about what you want included as well as a clear understanding between yourself and partner about why you both want to enter into a prenup. Doing this will help guide your choices when going through the process.
“Both parties should engage their own lawyer, preferably lawyers who specialise in family law. A prenup is only legally binding when two lawyers have signed a certificate confirming they have provided their respective clients with independent legal advice,” Monaghan adds.
“Prenups can often be set aside if one or both of the parties have not received proper legal advice before signing the prenup. As a prenup is a contract between two people, you cannot use the same lawyer as your partner. Each party is required to obtain independent legal advice for the prenup to be legally binding.”