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.
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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.