For the record I am against prenuptial agreements.
I have clients come to me and say, “I would like a pre-nuptial agreement. I just want what’s fair.” My reflex response as a family lawyer is to say, “Let’s set the record straight. If you just wanted what was fair you wouldn’t need the pre-nuptial agreement. What you want is an agreement which is not fair and is in your favour.”
Having said that, it’s not surprising that I don’t do as many pre-nuptial agreements in practice, as maybe I could.
There are, of course, exceptions to the rule. Families with enormous amounts of capital invested in their business, such as farming families often need the financial security of a prenuptial agreement to protect their assets. Enterprises like these and the family relationships that are built around them, are often dependent upon keeping the business assets intact. In the event of a family law situation where an owner or a partner in a family farm is obliged to buy out their spouse, the entire enterprise faces either a draining of working capital or a carve up of the income-producing asset which compromises everyone involved.
In circumstances where an extended family unit is co-dependent or the economic liability of the enterprise is dependent upon those assets, pre-nuptial agreements make a lot of sense. An example of the use of pre-nuptial agreements, or financial agreements, as they are referred to in the Family Law Act, as a succession planning tool was shown in the article titled ‘Pre-nup a succession secret’ appeared in the Weekly Times NOW on 28 September 2010. It involved a case study where such agreements were used in the fifth- generation family business of Brown Brothers Wine Makers.
If you have substantial family assets that require protection by a pre-nuptial agreement (financial agreement) or have been asked to sign a pre-nuptial agreement by your proposed spouse and would like to discuss it with us, please do not hesitate to contact us for advice on your situation.