When you’re in the throes of romance, wearing your best heart-shaped, rose-tinted glasses and imagining a long-term future with someone, thinking about worst-case scenarios – let alone talking about them – can feel like a big old buzz kill.
I invite you to light all the candles you want and pour the most expensive glass of red wine, but I promise the words “I want a prenup” will still kill the mood.
Putting an agreement in place when you’re in a healthy and loving place, and having an understanding of where you’ll both stand in a worst-case-scenario is a must.Credit: Illustration: Dionne Gain
And I get it. Strategising for failure in a relationship can feel like you’re setting the relationship up for failure and maybe even willing the worst to happen. But let me explain why that’s far from the truth, and why everyone should have a prenuptial agreement in place, even if you’re going into a long-term relationship without assets.
The first thing to note is that in Australia, we don’t actually have prenups. They’re a distinctly American thing that, thanks to pop culture, we’ve come to think of as our own. Here, the closest thing we have to them is a binding financial agreement (BFA), and in news that will surprise absolutely no one, I’m a big fan of them.
The reason I like BFAs so much, aside from the fact that they ensure you and your partner are on the same financial page from early on in a relationship, is because far from willing the worst to happen – whether you’re married or in an unregistered domestic relationship (also known as defacto relationship) – they actually prevent it.
Let me explain. Often when a couple gets together, they’re still relatively young and haven’t yet got those well-paying jobs, achieved high-flying careers, acquired assets, received any inheritances, or accumulated a healthy amount of superannuation.
No one bats an eyelid at paying car insurance, health insurance, or home insurance. Insurance for your personal finance should be no different.
So you might be thinking, you can’t divide half of nothing, Victoria! The problem with this logic, though, is two-fold. First, it negates any debt a person might be bringing to the relationship – be it higher education debt, a car loan, credit card debt, or worst, hidden debts from gambling or gaming addictions, which is far more common than most of us would like to acknowledge.
The second issue with this logic is the assumption that any accumulation of wealth during the relationship will be divided equally if and when the time to part ways eventuate. (If you are entering a relationship with pre-existing assets, it’s even more important to consider a BFA.)
It may not be romantic, but we need to talk more about prenups
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02.03.2024
When you’re in the throes of romance, wearing your best heart-shaped, rose-tinted glasses and imagining a long-term future with someone, thinking about worst-case scenarios – let alone talking about them – can feel like a big old buzz kill.
I invite you to light all the candles you want and pour the most expensive glass of red wine, but I promise the words “I want a prenup” will still kill the mood.
Putting an agreement in place when you’re in a healthy and loving place, and having an understanding of where you’ll both stand in a worst-case-scenario is a must.Credit: Illustration: Dionne Gain
And I get it. Strategising for failure in a relationship can........
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