Dividing assets: Prenup or leave to chance?

Dividing assets: Prenup or leave to chance?

With the announcement of Bill and Melinda Gates' divorce, media reports are rife with questions about how their vast assets will be divided. According to court documents filed as part of their divorce proceedings, even though Bill had considerable wealth when they married, Bill and Melinda did not have a prenuptial agreement. This means that they did not have a legally binding agreement, that dealt with how their assets were to be divided in the event of divorce.

As Bill and Melinda married in 1994, it is perhaps less surprising that they didn't have a prenup, instead leaving a future property settlement up to agreement, or determination of the court.

Prenuptial agreements, called Financial Agreements under Australian Law, which are binding and enforceable (provided they comply with legal requirements), have been available to couples entering into a marriage since 2000.

For de facto couples, various state regimes were in place to enable de facto couples to enter into similar agreements, called cohabitation agreements. Since 2009 (or 2010 for residents of South Australia), de facto couples have also been able to enter into prenup-style Financial Agreements, prior to commencing cohabitation.

Where couples enter into a prenup-style Financial Agreement, they agree on how their assets will be divided, in the event the relationship ends, with a view to avoiding later disputes. Increasingly, couples with significant wealth are choosing to enter into Financial Agreements, to protect the assets they bring in, and avoid legal proceedings should things not work out. While Melinda and Bill seem to have resolved matters very amicably and sensibly (although details are not yet available), a Financial Agreement can avoid leaving it to chance.

Lander & Rogers' family lawyers have extensive experience advising individuals on matters relating to dividing property and other assets. Please contact a member of our Family & Relationship Law team if you would like to discuss how a Financial Agreement could safeguard you and your assets.

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