Everyone goes into a marriage planning to live happily ever after. However, 1/3rd of all marriages now end in divorce. As a result, many people look to get a prenuptial agreement before they marry. This way, each party is protected in the event the relationship breaks down.
If you entered into a prenup overseas and you’re now living in Australia, then it’s likely you’re wondering whether international prenuptial agreements are valid here in Australia. Let’s take a look.
Are international prenup agreements valid in Australian Family Law?
Regardless of your citizenship status, international prenuptial agreements are not valid in Australia. This is because, as soon as you land in Australia, you’re bound by Australian law.
Under Australian law, either party to the marriage can make a claim over assets from the marriage as part of a property settlement claim. This remains the case even if they’ve signed a prenuptial agreement in a different country.
If a claim for a property settlement claim is brought against you, then you can let the Family Court know about the existence of an international prenup. But, the court is not legally bound to enforce it and may decide to give your partner assets that were not assigned to them in the original agreement. As a result, you should speak to an international family law expert before you enter into a prenup overseas and/or dealing with overseas property.
Can I get a new agreement made in Australia?
Yes, Australia does allow for the creation of prenuptial agreements, also known as ‘binding financial agreements’. These became enforceable by law in 2000 with the introduction of the Family Law Amendment Act.
If you already have a prenuptial agreement from overseas, you can instruct a lawyer to draft a binding financial agreement for you in Australia, in similar terms to the ones you included in your international prenuptial agreement. However, the following requirements must also be met in order to ensure that the agreement is enforceable:
- Both parties must receive independent legal advice from different lawyers who are practising in Australia
- The agreement must be in writing
- The agreement must be signed by both parties
- The lawyers for both parties must sign a certificate confirming that they gave detailed, independent legal advice prior to the party signing the agreement on the advantages and disadvantages of entering into the agreement as well as the effect of the agreement and that party’s likely entitlement under the Family Law Act.
If you follow the above steps, your agreement will be binding. However, under Part VIIIA of the Family Law Act 1986, the court can refuse to enforce agreements on the grounds of fraud, duress, mistake, undue influence or unconscionability.
Agreements can also be refused if it’s impracticable for all or part of the agreement to be carried out, or if there has been a material change in the care of a child leading to hardship.
What is a prenup and is it right for me?
Your prenuptial agreement (known officially as a binding financial agreement in Australia) will cover what will happen in the event that your relationship breaks down.
The agreement can cover funds held in bank accounts, real property, superannuation, investments, business interests, inheritances and pension entitlements, as well as outline any obligation to finalise debts and liabilities of the relationship. Due to the way that relationships evolve over time, it’s important that all future aspects of the relationship (such as children) are also considered.
Whether a prenuptial agreement is right for you will depend on your circumstances. However, prenuptial agreements are usually popular when one party:
- Is entering a second marriage and has assets from their first marriage that they would like protected or passed onto their children
- Is moving into the other party’s property
- Has more property or assets than the other at the beginning of the relationship
- Wants to avoid any hostility or uncertainty if the relationship does breakdown
- Wants to protect a future inheritance or a family business.
There are pros and cons associated with entering into a prenuptial agreement, and you should consider these carefully before you raise the idea with your partner.
We take into account the constantly changing business and personal circumstances of our clients.