Prenups

Prenups can cut financial stress in blended families

Second marriages have a greater failure rate than first marriages. How often are the step children blamed for scuttling the relationship? There are many issues but one of them is almost certainly financial.

In the early days of “No Fault” divorce an inheritance was given far more credit than now. Even inheritances received after separation are included in the property pool for distribution. But not dollar for for dollar. The value of the bequest diminishes over time. Pre owned assets are treated the same way. It is the dreaded “Erosion Principle”. This “throw it all in the pool concept” is becoming far more common as.the baby boomers die and leave their assets to separating children.

A Prenup can solve that problem.

The most logical and fair Prenup is where both parties have adult children to whom they want to leave their assets, not a separating step parent. To quarantine those assets you must have.a Prenup. There is no other way to oust the jurisdiction of the Family Court. Will the Prenup be binding? Done properly by an Accredited Specialist Family Lawyer, it is very likely be found binding if challenged. It is in any event much better to have one than not.

Then you can tell your children that you have not married a gold digger.

Of course, the children must have their own Prenup in place to protect their inheritance when received.

Sorry, I can’t help you deal with a 14 year old feral step daughter.

The above legal issues also apply to de Facto and Same Sex relationships. For more information and articles, see my website under the Prenups tab. For the purists – they are legally known as Binding Financial Agreements under 90B or 9UB of the Family Law Act. But everyone knows what a Prenup is.

Peter Szabo

peter@psfl.com.au

ww.psfl.com.au

0417539204

 

Binding Financial Agreement Married

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Peter Szabo  Family Law

Peter Szabo is an acknowledged leader among Family Lawyers. He has been at the cutting edge in the development of Family Law. He was involved in the famous case of Ascot Investments and Harper. This 1980 High Court decision remains definitive of third party rights in the Family Court. His main focus now on the interaction between Family Law, asset protection and succession planning. Peter is author of the Family Law Practice Manual. His qualifications and experience are extensive and include:

  • Accredited Family  Law Specialist;
  • Fellow of the International Academy of Matrimonial Lawyers – www.iaml.org
  • A trained mediator; and
  • A trained collaborative lawyer

The  fusion  of  de  facto and  same  sex  couples  under   the Family Law umbrella likewise  highlights the need for families, particularly those  involved in family businesses  to consider the ramifications of these developments. Failure  to do so can result  in unwanted consequences on  family breakdown. Not to mention the emotional distress and legal costs  involved.

Financial  Agreements (often called  Prenuptial Agreements) can be constructively minimise those complications. In recent decisions of various  State Supreme Courts  testamentary intentions expressed in such  an agreement has been  taken into  consideration in determining whether to allow  a claim on an estate. A properly constructed agreement with reasonable terms  can  achieve  this  result.  Willmakers can  to this  extent add   a  defence to  a  claim   by   a  widow/widower.  This  is becoming a very  important issue with Greying Australia and the increasing incidence of Blended Families.

Other publications by Peter Szabo

  • The Family Court Practice Manual (since1985), published by the Leo Cussen Institute of Victoria and now  in its 6th  edition.
  • The Family Law Practice Manual – published by Documents Online
  • Family  Law Financial  Settlements – Law Book  Company
  • Tax Issues in Family Law – the difference between Hacking and Carving
  • The Family Breakdown chapter in the CCH Master Financial  Planning  Guide
  • Numerous papers annually for presentation

to lawyers,  financial planners and accountants nationally, on all aspects  of Family  Law.

Other contributions to the legal profession 

  • Family  Law Instructor at the Leo Cussen Institute since 1978.
  • Founding Chairman of the Advisory Committee to the Accreditation Board for Family  Law Specialists in Victoria, the first specialist program in Australia.
  • Current chair of the Accredited Specialists Continuing Education Committee

A self-confessed computer nerd, he has presented Nationally on   office  automation  systems.   Peter has been described  as  one   of   the Pilgrim Fathers  of technology in the Legal Profession. Now a Life Member, he was President of the Apple Users of Melbourne computer club from 1990 to 1992. He continued lecturing monthly on technology until 2005.

 

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