Only 5% couples sign a prenup before they get married
Although prenuptial agreements have been available in Australia for more than a decade, very few couples are choosing to put one in place according to an Easy Weddings poll. Only 5% of those that took part in the poll said they had signed a prenup, while 88% said they had not and 7% were still considering it.
It is understandable that most couples choose not to set up a prenuptial agreement before they get married. After all this type of agreement generally comes into force when a marriage breaks down and most couples don’t get married with the expectation that it will end in divorce.
A prenup is a binding financial agreement that sets out how the property and financial resources of both parties will be distributed if the relationship breaks down. It can also address maintenance of either party during the marriage as well as if that marriage ends. Theoretically a prenup prevents the couple having to go to court to settle their financial affairs if the relationship breaks down. Although they are available to anyone, prenups tend to exist between couples with a large amount of property or wealth, especially if one partner has significantly more property and wealth than the other.
One of the reasons that few couples set up prenuptial agreements is that they don’t trust that they will be legally binding. A prenup should be legally binding if it complies with certain rules, for example it should be in writing and it should be signed by both parties, who should both have received legal advice.
However, there are exceptional circumstances where a prenuptial agreement can be overturned in court, and some people feel that these make them less valuable. Others would argue that the possibility of overturning a prenup stops the wealthier partner from feeling that it gives them carte blanche to behave however they wish towards their partner without worrying about the financial consequences.
Legislation passed in 2010 has made it simpler to set up a prenuptial agreement, as well as making the rules clearer on overturning these agreements, so we may see more couples signing up to them in the coming years.