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Are prenups only for the rich and famous?

by | Jun 8, 2023 | Family Law

Jeff Bezos’s engagement to Lauren Sanchez sparked headlines in the entertainment world when Lauren Sanchez was seen with a rumored 2.5 million (USD) engagement ring. The burning question in the legal world was whether a prenup would be entered into between Benzo and Sanchez.

The answer appears to be “yes”. Following a $50 billion (USD) settlement with his former wife, MacKenzie Scott, it might make sense that Jeff Bezos was considering a prenup this time around.

A prenup is also known in Australia as a Binding Financial Agreement (BFA) and is a legal contract between two parties entered into either before or after the couple marries or commences a de facto relationship. The purpose of a BFA is generally for the protection or clarification of personal properties and assets in the event of a divorce or separation.

An interesting article by Sarl Cooper “Should wedding planning include discussions of a prenup?”[1] can be used as an insight into proposing and preparing a BFA.

There are many reasons why it is worth considering a BFA, they including:

  • Easing the division of assets during a separation/divorce;
  • Maintaining an understanding and certainty of the properties being divided;
  • Reducing mental and financial stress during a separation/divorce;
  • Avoiding Court action resulting in high litigation costs and delays;
  • Protecting family assets and inheritances; and
  • Ensuring children of past and present relationship are provided for financially.

A BFA requires both you and your partner to obtain independent legal advice and is drafted t to comply with the Family Law Act 1975. They are at first instance legally binding unless terminated by the parties or the Court. It is unusual for a Court to set aside a BFA reasons that the Court can do this include (but are not limited to):

  • Duress – where one party is coerced in some way into signing the agreement, an example is the case of Thorne v Kennedy[2];
  • Fraud;
  • Undisclosed assets; or
  • Independent legal advice not being provided.

To ensure your assets are protected or have any questions about your situation, please contact our experienced Family Law Team on 03 9614 7111 or email melbourne@nevettford.com.au.

[1] https://www.psychologytoday.com/au/blog/sex-esteem/202305/should-wedding-planning-include-discussions-of-a-prenup

[2] Thorne v Kennedy [2017] HCA 49.