4 big reasons to get a prenup, even if you don’t consider yourself rich

A prenuptial agreement, known legally as a Binding Financial Agreement (BFA) in Australia, is not exclusive to the wealthy and famous. And nor should it be! 

By Courtney Mullen, Head of Family Law at Roger Fritz LLP, Canberra.

While raising the topic of prenuptial agreements can be intimidating and perceived as unromantic, there’s also a plethora of prenup benefits to be had. And those benefits apply to you even if you don’t have a lot of money. 

Read on to learn more about how prenups work as well as some key reasons you should consider formalising a prenup or BFA, even if your net worth is negligible, or you don’t consider yourself wealthy.

How prenups work

A prenuptial agreement (or BFA) is a legally binding contract created and signed by two people before they are married. This agreement usually provides the framework for how financial issues will be handled if the two parties ever decide to separate or divorce. 

Property, inheritance, income and businesses owned by either party before the marriage or acquired during the marriage can be covered in this contract.

So why should you get one, even if you’re not “cashed up”?

4 big benefits of prenups for the non ”rich”

1. You can protect what’s important to you and your future assets! 

Even if you don’t have a lot of money now, you still may have valued assets you want to protect – like a beloved pet! 

It is also protection for gifts you may receive in the future or assets you will acquire to ensure that you retain them as part of a financial settlement.

2. It’s like an insurance policy 

Think about it as an insurance policy against the risk of separation occurring and a divorce settlement being out of your control. A prenup, carefully drafted, can give you certainty about the future while giving you flexibility about how you acquire assets in the future. 

3. You have transparency about your financial positions from the start 

A prenup requires disclosure of your assets and financial circumstances to take place. Doing this as you embark on a relationship sets you, as a couple, up for open and transparent ongoing conversations about finances moving forward.

For example, a prenup agreement can help specify who owns any existing debt or debt incurred during the marriage.

4. Your property settlement is done! 

Suppose the worst happens, and your relationship breaks down. In that case, 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. 

By having the binding financial agreement already in place, you’ll save yourself the monetary and emotional stress that may come with having to resolve taking legal action via the court system.

Every relationship is unique. Getting a binding financial agreement arranged will be dependent on your circumstances. Have any extra questions about how prenups work? Contact our team via the form below for some friendly, professional advice.