Necessity Of PreNuptial Agreements Within Australia Essay
Necessity Of Pre-Nuptial Agreements Within Australia Essay, Research Paper
Legislation recognising pre-nuptial agreements has been well overdue and this recognition will significantly improve the social and economic impact of divorce.
Pre-nuptial agreements, however controversial, are nothing more than a commonsense idea which not only eases the burden that the financial division of divorce has of the courts, but makes the whole divorce proceedings emotionally and financially easier for everyone involved. Something as simple as a contract which states the financial situation of each party before marriage is not “giving up before you’ve even started”, but an effective marriage contract which allows the partners to discuss their financial situation in a committing, fair and stable environment.
Since the 27th December 2000, pre-nuptial agreements have been legally binding by official legislation within Australia as an effective way to reduce post-marital disputes. (Queensland Broker Feb.2001) Pre-nuptial agreements are basically a financial agreement which are made before marriage. It can be signed by anyone who requires a different property division than that set out by the Family Law Act, and it conveniently deals with difficult issues such as the financial situation of each party before marriage, including share of property and debts and obligations of each party before marraige. It outlines possible future investments and what is to happen to them, such as subsequently discovered property, planned business division, and spousal maintainenece. For a pre-nuptial agreement to be valid, supporting documentation on each pre-nuptial term is required.
Most importantly, it endeavours to do so in a way which is justly equal and fair to both parties, taking not only the financial situation of each party, but the effort each party is putting into the marriage- explain for example, who is raising the children and looking after the home. It also deals with, to a small extent , the extra finance given to whoever would have custody of the children post-divorce, though this is mostly in the hands of the divorce courts. (www.pre-nuptialagreements.com.au) All of these factors can only help the social and economic impact of divorce, as it is making it easier for everyone involved.
Before December 2000, pre-nuptial agreements were not held legally binding by legal courts – couples could form their own agreement before marriage but the courts did not have to stick by them. This created a problem within the marriage where certain circumstances called for the division of property to be different from that as stated by the Family Law Act. Some of these special circumstances might include if you want to keep premarital assets seperate, if you are blending families (both partners already have children), you want to ensure that the family wealth stays within the family, or if you simply just want certainty as to property rights and maintenance payments upon a potential divorce. (www.pre-nuptialagreements.com.au)
A newspaper article written on the day that prenuptial agreements became financially binding writes:
Pre-Nuptial agreements became legally enforcable today in an effort to reduce the amount of time taken resolving disputes in the Family Court…. Sydney family law specialist Bill Karras said the legislation was definately overdue. (M.Denny, B.Crawford, The Australian p.3)
It goes on to explain the benefits of having pre-nuptial agreements as opposed to not having them legally binding, with a spokesperson from the federal government, Daryl Williams, claiming that the legislation was overdue and would cut down the costly Family Court process for couples who are splitting up. Considering that 46% of marriages fail and this costs the Australian taxpayer an estimated three billion dollars per year, this can only be of significant economical advantage to the greater public.
It is particularly convenient if partners with very different financial situations enter a contract of marriage – for example, the common “money-grabbing” stereotype of poorer people marrying richer people through a want of money, not love. Though this particular situation is not an everyday occurance, it does happen and it helps to be prepared, should anything happen to disadvantage the economically stronger party. (Eekelaar 1998: 470)
Understandably, there are some arguments against pre-nuptial agreements, but these are outweighed by the advantages. “Pre-nuptial Agreements Australia” is a company which was established in June 2000 to help Australians tie the financial knot. They state that:
“We understand that a pre-nuptial agreement does not induce images of romantic interludes or marital bliss before marriage. But pre-nuptial agreements house the capacity to promote greater love, communication and happiness during marriage.” (www.pre-nuptialagreements.com.au)
Queensland Law Broker February 2001 states that some couples are refusing to take part in this simple and inexpensive procedure due to moral beleifs that it welcomes instability into a marriage, that the party who welcomes the legislature has a lack of trust in the other party.
Taking an entirely different viewpoint to that which states that signing a pre-nuptial agreement indicates a lack of trust in the other party, is the view that the loving nature of couples pre-marriage will result in a fair and equal agreement which understands and makes room for each partners goals and plans in an optimistic setting. If a person is not capable of discussing financial issues before marriage then they are unlikely to be able to handle the day to day financial stresses of marriage. Disagreements over finance are the number one cause for divorce, and having the peace of mind early in the relationship only leaves an open avenue for a good marriage and good times together, definately contributing to a better social outcome. (www.pre-nuptialagreements.com.au)
There is the doubt that if there is one dominant party who controls all the family assets, they can conceal hidden assets to the Courts (for example, if they have invested in properties overseas the courts have no way of clarifying this short of a treaty with every country in the world) so that this asset does not have to be divided. So subsequently one party will end up better than the other. Similarily, if there is one dominant party from the beginning of the relationship, the submissive party could agree to a less than fair agreement on their behalf. (www.austlii.edu.au) However there are safeguards created for this situation, whereby a pre-nuptial agreement will not be deemed valid until both parties have obtained individual financial advice from industry professionals. (www.democrats.org.au/campaigns/prenup/)
More obvious benefits of prenuptial agreements include the fact that they make it simpler and more user friendly to sign into a contract with the other party, so, in the case of a divorce, the proceedings are much more pleasant, quicker and less traumatizing for everyone involved. Divorce can tear especially children apart and seeing their parents go through less stress can surely only be of good value for their own future- children whos parents divorce actually have a less chance of having a successful marriage themselves.
A perfect way to sum up the need for individual couples to obtain pre-nuptial agreements is expressed in the quote “Nobody plans to fail- but a lot of people fail to plan”. While marriage is traditionally seen as a life-long commitment, with our changing society it is becoming more “Until Divorce do Us Part.” There is an unwavering need for pre-nuptial agreements, and this change of legislature whereby pre-nuptial agreements become binding has been well overdue for a long time. Pre-nuptial agreements are useful, provide peace of mind and are an outlet for the greater community as a whole to contribute together to making a more economically stable system.