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A family lawyer on why more couples are saying ‘I do’ to prenups
With the increasing number of couples opting for prenuptial agreements, a law firm principal discusses what this surge means for lawyers in this field and outlines strategies for effective preparation.
Grace Robbie
Prenuptial agreements are gaining popularity in Australia, with national practice AF Legal Group reporting a 79 per cent increase in inquiries between 2022 and 2023.
In response to this surge, Michael Tiyce, principal at Tiyce and Lawyers, has identified the key factors driving the growing demand for prenuptial agreements in Australia and examined what this trend means for lawyers in this field.
What is driving the rise?
Tiyce explained that one of the main drivers behind the rising demand for prenuptial agreements is increasing economic instability, prompting more individuals to safeguard their assets before marriage.
“Without a doubt, economic uncertainty has played a major role in the growing popularity of prenuptial agreements in Australia and the increasing generational transfers of wealth, commonly referred to as ‘the bank of mum and dad’ (or grandparents!),” he said.
He also noted that it has become increasingly common for parents to require their children to secure a prenuptial agreement as a condition for financial assistance, whether provided as a gift or a loan.
“It is now relatively common for parents to make such gifts or loans on the basis that the parties enter into a financial agreement protecting the contribution,” he said.
Additionally, Tiyce emphasised that Australia’s ageing population is another significant factor contributing to the rise in prenuptial agreements.
“I also believe that an ageing population is having an impact as it’s enabling people to separate later in life, and therefore creating a need to safeguard property accumulated during previous relationships, for children of that relationship – interestingly, this is an issue in succession act (family provision) claims, too,” he said.
The role of lawyers
As the demand for prenuptial agreements continues to rise, Tiyce noted that family lawyers will experience an increased workload and a greater emphasis on accuracy in drafting these legally binding documents.
“Lawyers have always played an important role; the legislation requires incredible specificity and accuracy, and more legislative certainty has also meant more lawyers are willing to act to prepare these agreements,” he said.
However, Tiyce cautioned that many individuals are attempting to take shortcuts by drafting their own agreements, a practice fraught with significant legal risks.
“There’s no doubt that we are receiving a greater number of these requests and aware that there are others attempting to DIY prenuptial agreements, but these are fraught with risk and seldom run smoothly because they are legally unenforceable without the provision of legal advice,” he said.
With legal professionals playing a key role in guiding clients through this process, Tiyce emphasised the importance of lawyers encouraging their clients to engage in open and honest discussions before signing any legal documents.
“It’s important for the parties entering prenuptial agreements to have the hard conversations upfront about the realities of decisions moving forward – such as whether having children is likely or buying property jointly,” he said.
“We advise the importance of formal documents, such as loan agreements, and make sure the financial agreement itself is strictly in accordance with the legislative requirements.”
Shifts in family law practices
As prenuptial agreements continue to grow in popularity, Tiyce anticipates a significant transformation in the practice of family law in Australia.
One of the most notable changes, he noted, is the growing reliance on private ordering of financial arrangements, allowing individuals to take greater control over their legal and financial affairs.
“The biggest shift we’ve seen is a greater reliance on private ordering of arrangements – we are seeing this especially popular among older clients or those who have previously been married,” he said.
Another notable trend Tiyce has observed is the increasing demand for prenuptial agreements among couples who are already married.
He explained that this shift is driven by individuals who have witnessed the complexities and challenges faced by friends or family members during contentious divorce proceedings and now seek to safeguard themselves against similar outcomes.
“I also think within this rise, that we are seeing an increase of prenuptial agreement requests from couples who are already married. A lot of the time, it’s due to knowing couples who’ve unfortunately had messy divorce proceedings, and it’s looking to ensure that doesn’t happen to them, should marital issues arise,” he said.
