Last night, I had the pleasure of representing Coleman Greig as a participant on SBS' Insight program, where I was given the opportunity to discuss Binding Financial Agreements (or, to use the vernacular, 'Pre-Nups'). First and foremost, I would strongly encourage you to watch the show, although to save readers some time I thought I would use this opportunity to give my 5 key takeaways from the show, why to implement them, and how to go about doing so in an effective manner:
Less is more:
One of the people on the show had taken steps to include everything
in their
Pre-Nup, down to the Tupperware. Whilst I understand the cost
of Tupperware (if not the attachment to it), I think that the less
you include in a
Pre-Nup, the less likely it is to be set aside in the case of a
relationship breakdown. Most people simply want to protect one
asset (
usually a house) that they have brought into the relationship.
If you stick to the principle of "less is more", rather
than resorting to crystal ball gazing to sort out what will happen
in the future, you are less likely to run into trouble.
Have the conversation:
Most people on the program who had entered into Binding
Financial Agreements had ensured that the conversation had
taken place in a mature and commercial way, well before actually
signing the agreement. This mature and proactive way of dealing
with the issue helps to avoid any element of duress, and will also
put you in good stead with regard to knowing where the other person
is coming from, and whether an agreement is right for both
parties.
One size does not fit all:
There were varying views in the audience as to whether a
Pre-Nup should be entered into, and whether they were a good
idea, which makes clear that they truly are an individual choice.
Whilst I reflected
on my personal circumstances on the show, and concluded that a
Binding Financial Agreement is not right for me, this does not mean
that they are not a useful tool to protect assets being brought
into a relationship.
Changing demographics:
In the past,
Pre-Nups were more often than not the domain of wealthy older
people protecting their assets going into a second marriage -
although this is changing. With the inability of young people to
enter the property market, more and more parents are assisting
their children, leading to these types of agreements being entered
into by young people, often at the instigation of their
parents.
Kids matter:
Most agreements, when put together effectively, will specifically
state that they will still have effect whether or not the couple in
question have children. However, having children manifestly changes
your financial circumstances, so real thought does need to be given
as to
what the agreement should say about children, whether it should
still have effect, or whether allowances would need to be made
(usually monetary) based on whether there are children, and if so,
how many.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.