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The Sydney Morning Herald
10 January 2010

Prudent prenups have more strings attached
Alex McClintock

The popularity of prenuptial agreements is expected to surge after laws that strengthen them took effect on Monday.

Research by wedding website theknot.com.au found that 14 per cent of engaged couples signed prenups, which are considered binding financial agreements under Australian law.

John Barkus, a partner at the Sydney family law firm Barkus Doolan Kelly, said binding financial agreements had become much more popular recently and the trend would continue.

"The Government is recognising that [popularity] growth by bringing in these changes," he said. "It's what people want.

"There are an increasing number of couples who say 'let's get real about this', especially with the greater incidence of relationship breakdowns than there were many years ago."

Under the legal changes, binding financial agreements are enforceable by a court even if they contain minor mistakes.

Other changes that came into effect last year extended the availability of prenups to a wider variety of people, including de facto and same-sex couples.

The majority of signatories are still wealthier heterosexuals and couples with a wealth imbalance, Mr Barkus said.

But for some, prenups are still a sticky issue.

Anne Hollonds, the chief executive of Relationships Australia NSW, said they were only appropriate for some couples and common sense should be applied.

"I don't think there's any nice way to do it. You just have to talk with your partner about what's important to you."

Ms Hollonds said people should be cautious about entering into agreements and remember that Australia has an effective and powerful system of family law.

"If you're agreeing to something now, you don't know what your situation will be 20 years down the track," she said.

Chris Dimock, a partner at Dimocks Family Lawyers, said binding financial agreements should be treated like a will - prudent but possibly unpleasant.

"Contrary to there being a social stigma, as more people become aware that these agreements are binding, more people will be interested," he said.

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ABC News
2 January 2010

Pre-nup changes a boon for lawyers
By Emily Bourke for AM

For the past decade, Australian couples have been able to sign financial agreements also known as pre-nuptials, enabling them to settle property and maintenance if the relationship ends and without having to go to court.

From next week, drawing up such contracts will be easier and they will apply to married, de facto and same-sex couples.

The Federal Government says the changes will relax the technical requirements for financial agreements and restore confidence in the binding nature of those contracts.

But Michael Taussig QC, a Melbourne-based family law specialist and the former chairman of the family law section of the Law Council of Australia, is not convinced.

"The lawyers that are in the know are actually clapping their hands because there's going to be more work for us, there's no doubt about that," he said.

"The law that's coming in sort of makes [pre-nuptial agreements] not so sacrosanct anymore.

"Firstly it makes the hoops that you've got to go through to make the agreements valid a little less arduous. And secondly it always gives the court the discretion to set aside an agreement if it doesn't like what's in it."

He fears the Government has not got the balance right.

"If I'm acting for the economically weaker spouse I'll say to them, well, look, if you can't get a settlement that you like and you have to go to court about it, you might as well apply to set aside the agreement and let the full force of the Family Law Act work in your favour," he said.

"If you're acting for the economically stronger spouse, you're going to say, well, get in there and settle it as quickly as you can because otherwise your agreement may well not hold up and it may cost you significantly more than what you think it's going to cost you."

To date, wealthier partners have been able settle matters with a one-off payment, but Mr Taussig says that is about to change.

"Usually the economically weaker spouse gets a larger up-front payment to sort of pay off the deal for not having to get ongoing spousal maintenance," he said.

"Now with these sorts of agreements able to be set aside more easily under the forthcoming legislation, people are going to be a little less sure that they've been able to cut off the tap of spousal maintenance."

The new rules apply to all binding financial agreements, whenever they were signed.

Mr Taussig says that represents significant risk.

"There will be a lot of nervous people because this legislation is retrospective," he said.

"We bleat about retrospective tax legislation as being unfair, well some people might say that it's a bit unfair... it's hideously unfair to legislate retrospectively for something that was perfectly OK and perfectly binding at the time that the contract was made."

The federal Attorney-General did not respond to AM's requests for an interview.

Audio: Legal concern over government changes to pre-nup rules (AM)