For Better or For Worse… For Richer or Poorer?
Financial or “Pre-Nuptial” Agreements are not something that should be entered into hastily or by simply using a precedent. Careful consideration must be given to all aspects of a couple’s relationship, both financially and emotionally. It is also a requirement that both parties to the agreement receive independent legal advice and that their solicitors sign a statement to the effect that the necessary advice has been provided to the client.
Just because a solicitor has signed off on the agreement and statement, does that mean it will be valid and binding? Not necessarily.
A couple had been in a relationship for 6 years and engaged for 11 months before the soon to be bride signed the agreement two days prior to her wedding.
The Federal Circuit Court Judge heard the woman was “driven to a lawyer’s office where she was forced to sign the (financial) agreement” two days before her wedding in 2008. Although vehemently denied by the husband, Justice Phipps acknowledged that the husband knew that if his future wife was presented with the agreement two days prior to the wedding she would believe she had no choice but to sign the agreement. Justice Phipps recognised that at the time the bride was given the agreement, already signed by the husband, all arrangements for the $40,000 wedding had been finalised and rather than face the humiliation of cancelling the wedding, the bride agreed to sign the agreement.
At the time of signing the agreement the bride’s assets amounted to only $10,000, including superannuation. This amount paled in comparison to the groom’s assets and financial resources, who had amassed investment properties, term deposits, superannuation and substantial savings, all of which had the potential to increase further over time.
The terms of the agreement provided for the bride to retain her assets listed in the agreement but quarantined the groom’s assets, despite the financial burden this would place on the bride in the event of marriage breakdown.
In his judgement Justice Phipps considered the husband’s current financial position which comprised of $330,000 of investment properties, the former matrimonial home worth $725,000 and a business valued at $238,722. The wife remained the primary carer of the couple’s two children and dependent upon government assistance benefits and child support.
Justice Phipps found in favour of the wife, setting aside the agreement on the grounds that the wife would face unfathomable hardship if it was not set aside. This enabled the wife to seek a property settlement in line with the Family Law Act (“the Act”).