At last, after kissing a myriad of frogs you’ve found your prince and he’s perfect! Well… almost. The wedding is fast approaching; you’re picturing what your new life will be like and basking in the happy images you’ve created until … the fateful words “prenuptial agreement” hit you like a grand piano dropped from the sky by cupid’s evil twin.
Should you sign one?
The ultimatum you now face is this – sign the agreement (without negotiation) or the wedding is off! What do you do? Do you really have a choice? Does getting independent legal advice about the agreement make it legally binding? The answer might surprise you!
Let’s suppose that you have been swept up by the romance of the relationship thus far. You love your partner and you’re not interested in the wealth that they have accumulated before your relationship with him began. Now, let’s make a few more assumptions to really paint the picture:
- Your partner is a millionaire and you have little assets;
- Your partner is an Australian citizen, and you live overseas and do not have permanent residency in Australia;
- Your partner’s native tongue is English, and English is your second language which you’ve picked up casually over time;
- The pre-nuptial agreement was sprung on you only a month before the wedding;
- You are desperate to start a family with your partner;
- You obtain independent legal advice about the agreement;
- You’re a hopeless romantic!
Despite the obvious inequality in bargaining power between you and your prince, you decide to sign the agreement. As far as you are aware, you are bound by the agreement. The wedding day is blissful, but down the track the cracks start to show and your prince turns into a frog once more! You cut your losses and decide it’s time to separate.
Your next step is to obtain legal advice about negotiating a property settlement. Before you know it, the live issue becomes whether or not the binding financial agreement (aka pre-nup) is in law binding at all! Earlier this year in Thorne & Kennedy  FCCA 484 the Court considered this very scenario and in the circumstances decided that the agreement was signed under duress. The agreement was set aside, despite each party having obtained independent legal advice.
Let this be a lesson to all parties hoping to rely on binding financial agreements for certainty – if there are a number of factors that culminate to indicate an inequality in bargaining power and this results in pressure on one party the effect of which is that there is a compulsion or an absence of choice, there is a real risk that the entire agreement can be set aside.