Are Prenups the height of romance? Rethink­ing Bind­ing Finan­cial Agreements

When peo­ple think about ​‘romance’, they tend to imag­ine things like can­dle­light, flow­ers, oys­ters, cham­pagne. Well, con­trary to pop­u­lar belief, I believe that Bind­ing Finan­cial Agree­ments should be bumped up the list. Whilst the ​‘brand­ing’ of BFA’s may need a lit­tle mar­ket­ing rework, they are, at their core, a deeply lov­ing and roman­tic document.

It nev­er ceas­es to amaze me how few peo­ple have frank, dif­fi­cult and open dis­cus­sions about finances pri­or to their mar­riage. The abil­i­ty to have open dia­logue about impor­tant issues such as rela­tion­ship expec­ta­tions and finan­cial goals is a cor­ner­stone of a healthy rela­tion­ship. Whilst the pre­vail­ing sen­ti­ment seems to be that BFA’s are unro­man­tic, in my view, the dis­cus­sions that pre-empt the prepa­ra­tion of a BFA are an oppor­tu­ni­ty to estab­lish trust, under­stand­ing and intimacy.

When approached with sen­si­tiv­i­ty and care (and obvi­ous­ly: inde­pen­dent legal advice) cou­ples gain a deep­er under­stand­ing of what’s impor­tant to their part­ner and the nat­ur­al (and pru­dent) con­cerns that they may have about their finan­cial secu­ri­ty in the future. 

BFA’s are an oppor­tu­ni­ty for cou­ples to work ​‘togeth­er’ to agree on finan­cial arrange­ments rather than leav­ing those deci­sions to the Court in the future. There are many rea­sons why more and more cou­ples are turn­ing to BFA’s such as:

1. Peo­ple are get­ting mar­ried lat­er in life, hav­ing accu­mu­lat­ed wealth, inher­it­ed funds or grown their businesses.
2. They have observed the sta­tis­tics in rela­tion to divorce in Aus­tralia and under­stand that the pos­si­bil­i­ty of sep­a­ra­tion is let’s say – ​‘not insignif­i­cant’.
3. They wish to avoid the sig­nif­i­cant cost and stress of pro­tract­ed Fam­i­ly Law lit­i­ga­tion in the future.
4. They want cer­tain­ty and safe­guards to pro­tect them­selves and the things that are unique­ly impor­tant to them (their busi­ness, prop­er­ty, pets, col­lec­tion of stamps/​watches/​handbags etc).
5. They want to put arrange­ments in place while they are in a calm and unpres­sured envi­ron­ment, rather than hav­ing to make dif­fi­cult deci­sions while feel­ing the emo­tion­al pain of a separation.

The feed­back I hear time and time again is that BFA’s are ​‘prepar­ing for divorce’ or in some way reflect a lack of com­mit­ment. I whole­heart­ed­ly dis­agree. The romance of the BFA is that each par­ty enters into the rela­tion­ship with peace of mind know­ing that nei­ther of them are in it for a ​‘wind­fall’ – and sim­i­lar­ly, that nei­ther of them feel ​‘shack­led’ to the oth­er out of fear that sep­a­rat­ing would be ​‘too expen­sive’.

Instead, each par­ty is there because they have made an informed deci­sion that they ​‘want’ to be there, and in feel­ing pro­tect­ed, they can invest their full atten­tion, love and devo­tion into the relationship.