Research from the Australian Institute of Family Studies (AIFS) shows that more and more couples are cohabiting for longer periods before marrying – if they marry at all. With the institution of marriage having evolved to become more of an option rather than a necessary norm, now is a good time to reflect on the financial risks and rewards of marriage.
This timeless institution that unites hearts and intertwines lives is a profound commitment that warrants careful consideration and informed decision-making – including what happens after the marriage ends.
In this article, we will share five invaluable tips from a family lawyer in Melbourne for couples considering marriage to help ensure they take the necessary steps to have a secure future together if and when they decide to tie the knot.
- Invest in an agreement to save money later
One important aspect to consider is the option of a prenuptial agreement. A prenup – or a binding financial agreement – is a legally binding document that outlines how assets, debts, and other financial matters will be divided in the event of a divorce or separation.
While it may not be the most romantic topic to discuss, a prenuptial agreement is the most accessible way to record and recognise what you had at the beginning of a relationship, just in case something happens down the road.
Make sure to discuss with a prenup agreement lawyer the contents of your prenup, as well as your terms and conditions to ensure your future is protected. However, it is important to note that due to the law still being in the development stage, some lawyers might be reluctant to provide advice regarding a prenup before marriage or in the early stages of a relationship, as challenges can be mounted.
- Have an honest conversation with your partner about money
Finances are a common source of tension in marriages. To avoid potential conflicts, have open and transparent conversations about money matters – talk about who is going to pay for what, where your income is going to go and how you will divide this responsibility.
A lack of communication is a critical reason why relationships break down, and parties mistrust each other. If both parties are aware of their contribution – financially and non-financially – at an early stage, they will be able to respect and understand each other.
- Spend your money on assets that appreciate
If you and your partner are considering marriage, a wise financial strategy is to prioritise spending your money on assets that appreciate over time. Very often, clients will approach us wanting to have the money they spent on the wedding of their dreams refunded to them by their former loved ones or their families.
The difficulty with the argument is that there is no resale value on your wedding – and resale value is the Federal Circuit and Family Court of Australia’s favourite valuation method. So, if you have invested your whole life savings into your wedding, recovering that money is going to be an extremely difficult task.
Instead, allocate your funds towards appreciating assets, such as real estate, stocks, bonds, or mutual funds. These assets have the potential to increase in value, offering a financial return in the long run. By directing your funds towards such assets, you can build wealth and secure a more stable financial future.
- Protect your family
With the increased cost of entry into the property market, more and more couples are unable to fund a purchase on their own. They turn to – or receive very generous offers from – their parents or extended family to assist them in the purchase of a home.
Because of this, subsequent arguments may arise that the lump sum payment your mother transferred to your bank account was a gift and not a loan. Hence, it is best to formalise any financial transactions within the family with written agreements, especially if it involves a significant amount of money.
Documenting the terms, conditions, and repayment arrangements can provide clarity and prevent future disputes, especially if you have a prenup agreement. Seek legal advice from an experienced family lawyer and have the agreement drafted and signed by all parties involved.
- Protect yourself from your partner’s family
Remember when your partner’s uncle popped around to do some painting? Or your parents-in-law suddenly found themselves in your garden helping out every weekend?
Family lawyers in Melbourne will be familiar with parties’ families suddenly being worth a whole season of renovation rescues once separation occurs – meaning a protracted argument about just who installed that downpipe.
The better option? Get a tradie and do not owe anyone’s family anything.
Engage a trusted and reliable family lawyer today
Recent research suggests that the odds have improved on marriages indeed lasting “forever”. This is partly because people are cohabiting more for extended periods, road-testing their relationship in advance. So, when it is time to consider marriage, we hope these valuable tips will help you approach your union with a solid understanding of the risks of marriage and how to overcome them.
At Nevett Ford, our experienced family lawyers in Melbourne are ready to provide you with expert advice and assistance on a wide range of family law matters, including prenuptial agreements. Contact us today to discuss your situation and see how we can help you.