Tuesday, June 13, 2023

When prenups** will fail – part II

View Legal blog – When prenups** will fail – part II by Matthew Burgess

Last week’s post considered a number of the situations that might lead to prenups (or binding financial agreements) being declared unenforceable. Seven further examples are set out below:
  1. Impracticality – for most agreements, they are unlikely to be determined entirely void for impractical reasons, although there may often be components of the agreement that are ignored, particularly in relation to specific assets that can no longer be dealt with in the manner originally anticipated by the agreement.
  2. Lack of disclosure – while potentially caught by one of the other items set out above, the failure to provide full and complete disclosure can of itself be grounds for avoiding an agreement.
  3. Just and equitable grounds – in many respects, this is reminiscent of the 'vibe' in the Australian movie ‘The Castle’ – i.e. the court interprets the overall circumstances to assess that the agreement should no longer be binding.
  4. Public policy – this ground is similar to just and equitable i.e. the court determines that it is not in the public’s interest to see a precedent set for the agreement to be binding in the particular circumstances of the case.
  5. Ending due to lapse of time – some financial agreements have a specific time or duration – if no other arrangements are made before the ending of the agreement, it will simply lapse.
  6. Termination by agreement – if both the parties voluntarily agree, then the agreement can be terminated absolutely, or alternatively, a replacement agreement can be entered into.
  7. Death – many binding financial agreements are specifically crafted to end on the death of either party, however this is often subject to certain provisions being made under the estate plan of the deceased. It is important to be aware that in some states it is possible to have a binding financial agreement whereby the parties also agree not to challenge the estate plan of the survivor, however these rules do not apply in every jurisdiction.
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** For the trainspotters, the title of today's post is riffed from the Kayne West song 'Gold Digger'.

View the (kid friendly) Glee version here: