Importance of Pre nup agreement

Prenuptial agreements: Unromantic, but important
The prenup seems so utterly unromantic — or just plain wrong — but it's also become so right for so many these days: those keenly aware that a marriage may end up in a legal separation, divorce or death. Most prenups tackle financial issues such as real estate, division of bank accounts and potential spousal support in the case of divorce or separation.

Who does it apply to?
A BFA can be made between couples who intend to marry, are married, or have been married. Same sex couples and defactos have always been able to have a contract between them.

It needs to be signed by both parties, and a certificate of legal advice must be provided that the party concerned has obtained independent legal advice. The Binding Financial Agreement is not legally enforceable until a lawyer explains the BFA.

What does a BFA deal with?
A BFA can deal with any or all property and financial arrangements.
 It can include
• spousal maintenance,
• superannuation,
• and incidental or ancillary matters.

Why are they important?
BFAs result in greater certainty in property settlements. They allow couples who do have a relationship breakdown to take control of their financial affairs.

The agreement allows practical financial matters to be dealt with in a tax effective way. For example joint ownership of shares, real estate, or valuable personal commodities.

This results in greater certainty and avoids conflict over financial matters in the event of a relationship breakdown.

A BFA may be particularly relevant in the scenario where one party is bringing considerable family wealth into a relationship, for the protection of prior assets, or for farming properties and family businesses.
Second marriages should particularly consider a BFA.

Tax Planning
One can provide a tax effective mechanism for the division of property if there is a break down.

Who Needs Them? 
• Anyone about to enter a marriage who is concerned about the inadequacies of the laws in the face of today's social realities;
• Anyone who is remarrying;
• Anyone concerned about protecting the assets of children from a prior marriage;
• Anyone who has a financially dependent parent;
• Business owners, particularly of professional practices and particularly those with business partners, because a spouse effectively becomes a silent partner in the business;
• Anyone with significant separate property in states where a spouse is entitled to a share of income from separate property.
• Anyone whose intended spouse has significant premarital responsibilities, such as alimony, child support, or tax obligations.
• Anyone cautious enough to prefer a written record of the ownership of assets to avoid confusion in the future from creditors or other family members.

Guidelines for creating the agreement
A prenuptial agreement is valid only if it is created under two conditions:
1) There must be "full disclosure" between the two parties, in order that there will not be a finding of fraud, misrepresentation, or duress. Both must thoroughly disclose financial details: income, assets, and liabilities, in the document.
2) Each spouse must individually be represented by separate attorneys prior to signing the prenuptial agreement, again to reduce the risk of drafting and agreeing to an unfair agreement
Once each of the two conditions above are met, and the contents of the prenuptial agreement are satisfactory to both parties, you and your spouse each need to sign the prenuptial agreement, and the prenuptial agreement must be notarized.

Governing Law
Prenuptial agreements are recognised in Australia by the Family Law Act 1975

Contents
• Importance of finance agreement
• Who need them
• Governing law
• Assets distribution
• Full disclosure of assets
• Guideline for the agreement
• Tax planing

Reason to buy from Net Lawman
The pre-nuptial agreement from Net Lawman provides you a comprehensive range of agreements that save your time and can be amended accordingly as and when required.

What is Prenuptial Agreement?

Prenuptial Agreement

It is also called an premarital agreement, a written contract between two people who are about to marry, setting out the terms of possession of assets, treatment of future earnings, control of the property of each, and potential division if the marriage is later dissolved.

Fairly common
These agreements are fairly common if either or both parties have substantial assets, children from a prior marriage, potential inheritances, high incomes, or have been "taken" by a previous spouse.

Content can be vary

Content can be vary widely, but commonly includes provisions for division of property and spousal support in the event of divorce or breakup of marriage.

UK law
Prenuptial agreement have not traditionally been enforced in divorce law in England. A divorce lawyer is often asked about the possibility of making a prenuptial agreement before entering into a marriage.

 The normal reason for asking is that at least one of the parties to the intended marriage wishes to preserve previously acquired assets from the jurisdiction of the divorce courts. Unfortunately, the answer in almost all cases is that the jurisdiction of the divorce courts cannot be ousted in this way and that a pre-nuptial agreement is hardly worth the paper it is written on.

Why it is not the worth in English law
In order to understand why this is so one has to realise that the tradition of the English divorce courts is to look at all the assets of the marriage at the time of the divorce and to distribute and in whatever way they see fit and accordance with the perceived needs of the parties and of any children. This is done in accordance with certain principles laid down by statute and case law but nevertheless this is the basic outlook of English divorce law when it comes to regulating financial matters between the parties.

Benefits 
Making a prenup can:
• Protect separate property
• Support  estate plan
• Define what property is considered marital or community property
• Reduce conflicts and save money if one divorce
• Clarify special agreements between one, and
• Establish procedures and ground rules for deciding future matters

Sunset" clause
It often has what is called a "sunset" clause. This usually means that that it becomes invalid after a certain specified time period, or after the married couple has had a child. Sunset clauses vary from state to state. If the sunset clause is ignored, the agreement is void. Some couples then construct a pre-nuptial agreement to change the terms of their marital agreement.

Requirements
It must meet these requirements to be binding.
• They must be written
• The signing of the agreement must be voluntary on behalf of both parties,
• It can be invalid if one partner fails to disclose something important, and marries under false pretenses.
• The agreement cannot be morally or ethically unconscionable.

Contents
Pre nup definition
Benefits
Requirements
Sun clause

Prenuptial agreement protect premarital assets

Why agreement is required

When a couple take the step of living together, whether this is with a view to marriage or long term cohabitation, it is important that steps are taken to protect assets which are being brought into the relationship and to define what will happen to those assets in the unfortunate event that the relationship subsequently breaks down.

Exclude liabilities Pre nuptial agreement will protect all current and future assets. It excludes the liabilities of the parties towards each other and the asset of the parties earned before or after the marriage will remain the sole property of the individual party. If the parties do not prefer to enter into pre nuptial agreement, the assets will be divided on the equal basis.

Implication for Ireland
When determining what awards to make in relation to the division of assets on a judicial separation or a divorce the Irish Courts are bound by the requirement that they make "proper provision for both spouses" out of the assets of the couple. This requirement arises out of the special protection afforded to the institution of marriage by the Irish constition.

Inventory of assets Under the proposed agreement, a couple would complete an inventory of assets each person held before the marriage and agree that in the event of a divorce, each would be entitled to keep those original assets. However, any new assets acquired during the course of the marriage, such as improvements or additions to the farm, would be divided between the couple.

Protects Inheritances Prenups can ensure that any inherited money, property or assets will stay within the family. Protecting an inheritance is the primary reason middle-aged people with children are likely to enter into a prenuptial agreement. prenup can give peace of mind to children or other family members who worry about being effectively disinherited in the event of divorce.

Protects from Spouse's Debt

When divorcing, marital assets are not the only thing that must be divided: marital debt is divided as well. If one spouse incurred substantial debts before or during the marriage--while starting a new business, for example--in some circumstances, it may be unfair to hold the other spouse partially responsible for the repayment of the debt upon divorce. A prenup can determine who shall be responsible for debts incurred before or during the marriage.

Substantial protection and benefits of filing joint marital tax
Although it provides substantial protection for the Prospective Husband and the Prospective Wife’s separate property, it also allows the couple to avail themselves of the benefits of filing joint marital tax returns during the course of the marriage without creating the presumption that income from the respective parties has become marital/community property.

Contents
• Exclude liabilities
• Protection of assets and benefits of tax returns
• Protection from spouse debts
• Protect inheritance
• Inventory of assets

Reason to buy from Net Lawman The premarital agreement from Net Lawman provides you a comprehensive range of agreements that save your time and can be amended accordingly as and when required.

How Does a Prenuptial Agreement Work?

A prenuptial agreement is a private contract entered into by two parties before a marriage or civil union takes place.

Are There Any Limitations?

Pre-nuptial agreements do have limitations. They are not automatically legally binding. Courts can refuse to enforce them, particularly if the terms are unfair, or one party either did not understand the implications involved, or was put under pressure to sign. A court will also look at other factors within the marriage, such as children, the standard of living, length of union and the needs of each party.

How they work

Guarantee financial assets
Although prenuptial agreements do not guarantee a couple's happiness, they do protect both the bride and groom's financial assets if they do indeed divorce. A prenuptial agreement, on the other hand, guarantees what each person would receive.

What it defines
However, a prenuptial agreement be considered by anyone who owns a home or business, has children or grandchildren from a previous marriage, or will be supporting the other partner financially. It defines how those assets will be distributed in the event of a divorce, separation, or death. If neither of these events occurs and the couple lives happily ever after, then it does not affect the marriage. Essentially, it's just like an insurance policy - one use it only if one need it.

Making it Legal
 During the drafting of the agreement, both parties are required to disclose any and all of their financial assets. If, later down the road, it is discovered that either spouse hide something, then the prenuptial agreement can be declared invalid. When information is disclosed, both partners must sign the contract in the presence of an attorney. At this point, the pre-nuptial agreement is considered legally valid and will be upheld in court.

Can be amended 
A party may wish to amend a prenuptial contract if, for example, one or both of the spouses had minor children at the time the original prenuptial agreement was executed. The original premarital agreement may have financially provided for those minor children before providing for the spouse. However, as the years pass those minor children may be adults and financially independent and the spouses may agree to leave more assets to each other in the case of divorce or death.

Irish Law
Currently premarital contract are not legally enforceable in Ireland.

Under Irish family law, a couple’s combined assets are divided after a marriage break up, though not necessarily on a 50/50 basis.

How they work - an overview
It can be challenged later in court by an aggrieved partner. But in assessing the value of such an agreement, the courts ask themselves certain questions, such as:
• When entering the agreement, did both parties fully understand the nature of the agreement?
• Did both parties receive independent legal advice?
• Was there any pressure on any of the parties to sign the agreement?
• Did the party with most to lose make a full and frank disclosure of their financial status?
• Would it now be unjust to enforce the agreement, taking into account events during the signing of the agreement and events since?

Contents
• Guarantee security of finances
• Limitations
• Define assets
• Legally not enforceable
• Court assessment
• References