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Trend towards post-nuptial Binding Financial Agreements

By August 29, 2017No Comments

By Gianna Huesch

There has been a rise in the number of post-nuptial Binding Financial Agreements (BFAs) being entered into in the US and the UK, with lawyers there suggesting the increase in clients seeking out post-nuptial BFAs may be explained by “vengeful wives…turning to post-nups to punish their straying husbands” while keeping the marriage intact.

A UK divorce lawyer explains that the typical situation he sees is where “a husband has been unfaithful to his wife and she says to him: “I will stay in this marriage, but it’s going to be on my terms and it’s going to cost you.”

One wife describes her post-nuptial BFA as “the financial equivalent of castration”, after she told her philandering husband she would stay in the marriage on one condition: that they renegotiate their pre-nuptial BFA: “If her husband strays again, it will cost him dear: the fair split agreed on before their marriage is now heavily skewed in (the wife’s) direction.”

As with the more well-known pre-nuptial BFA, a post-nuptial BFA sets out how assets are divided on divorce or death, with the difference being that a post-nuptial BFA is made at a time after a marriage has occurred. Post-nuptial BFAs clarify each spouse’s financial contributions to a marriage, their assets and liabilities and the agreed division of those assets and liabilities in the event of marital breakdown, separation or death.

The main benefits of BFAs generally are that they provide some certainty and clarity on issues thereby reducing the likely costs involved with contested property settlements.  However, BFAs can move beyond financial matters to deal with other matters necessitating agreement, such as which country a divorce will take place in, matters of confidentiality and use of social media, and so on.  As one wife says, “It covers lots of things that we want to agree between us and not leave to chance.”

In Australia, post-nuptial BFAs are legally binding as long as the agreement fulfils the technical requirements of the relevant provisions of the Family Law Act 1975 and is correctly drafted. For example, individuals wishing to enter a BFA are required to avail themselves of independent legal advice before signing a BFA, and must obtain a Certificate of Independent Legal Advice to prove they have done so. While a BFA may be set aside by a court, this only occurs under specific and limited circumstances.

Apart from ostensibly being a way that wives may “punish” a cheating spouse, there are many other reasons why married couples might enter a post-nuptial BFA.

For example, in the UK, the increase in post-nups has been linked to the increase in the number of international “ultra high net worth individuals” (defined as those with more than US$30m in liquid assets) relocating to the UK.  With London now known as the “divorce capital of the world thanks to English law’s favourable attitude to the non-wealth creating spouse”, and given the pattern of extremely high divorce awards occurring there, such wealthy individuals are apparently protecting themselves from the risk of large settlements in the event of divorce by seeking out post-nuptial BFAs with their spouses before moving to the UK. 

Another advantage to the high net worth spouse is the fact that a post-nuptial BFA may involve a smaller payout than if a matter goes to litigation, and avoids having to provide full financial disclosure as to their real worth in a court.

The motivation for signing a post-nuptial BFA is not always self-serving.  Sometimes, couples agree to enter a BFA for practical reasons, such as if both members of a couple are earning well but one partner—usually the mother—gives up their career to raise children.  Given this may significantly diminish that partner’s earning capacity, a post-nup can be “a sensible and reasonable act”. Another common scenario is when one partner receives a significant gift from a family member or an inheritance that they would want to protect from being divided in the event the couple separates later.  Couples may see the joint decision as a smart way to protect their children through protecting the members of the couple from worst-case scenarios.

Other couples describe signing a post-nuptial BFAs as a “public celebration of independence and love”. While in other cases, the couple may hold strong beliefs about the need for couples to independently work out their own affairs rather than have the state, via the courts, make decisions for them.


Do you need assistance with drafting a Binding Financial Agreement, whether pre or post-nuptial?  Please contact Canberra family lawyer Cristina Huesch or one of our solicitors, Sharla Stevens or Angela Li, at Alliance Family Law on (02) 6223 2400.

Please note our blogs are not legal advice.  For information about how to obtain the correct legal advice, please contact Alliance.


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