Three days** before wedding: ‘’Hey! Let’s sign a prenup!’’

There have been a number of high profile cases in relation to the enforceability of binding financial agreements or ‘prenups’.

Anecdotally, a number of specialist family law firms now refuse to advise on these types of agreements and the case of Parkes [2014] FCCA 102 provides another example of a situation where a binding financial agreement was held to be invalid.

The key factors in the case here were as follows:

1. The couple had been in a relationship for around six years, and engaged to be married for almost a year.
2. The husband raised the idea of a prenup three days before the wedding and provided the spouse with a full agreement and the warning that if she did not sign it ‘the wedding was off’.
3. The wife claimed that she signed it within 24 hours on the basis that she felt she had no other choice, given the investment that had been made by the two of them and the significant number of guests invited to the wedding.
4. The court analysed the relationship between the parties and said that the husband had a special duty because of the unequal bargaining position and influence that he had over his wife.
5. Due to this aspect of their relationship, the husband owed a greater duty to the wife to give her sufficient time and space to consider her position. As this had not been done, the agreement was held to be invalid.

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** For the trainspotters, the title of today's post is riffed from the Janes Addiction song ‘Three days’. View here:

Binding financial agreements and trusts

As set out in earlier posts, and with thanks to the Television Education Network, today’s post addresses the issue of ‘Binding financial agreements and trusts’ at the following link - https://www.youtube.com/watch?v=dS8CjyW0hUY

As usual, a transcript of the presentation for those that cannot (or choose not) to view the presentation is below –

There is no doubt that a properly crafted binding financial agreement or 'BFA' provides the best protection from an asset protection perspective available.

The difficulty is that even despite the changes that the government has brought in to make binding financial agreements more robust, the reality is there is a level of scepticism about just how useful BFAs are actually going to be, because there seem to be so many ways in which they can be unwound on a technicality.

While the general view is that they are the ideal outcome in terms of protecting wealth, the conservative view would always be that steps are taken to complement the BFA and to try and ensure the assets are ultimately quarantined on a relationship breakdown. One obvious example is to implement testamentary discretionary trusts under the estate plan, regardless of whether a BFA is in existence.