Contesting a Will: The Affect of a Prenuptial Agreement

According to recent statistics from the Australian Institute of family studies, around one in three Australian marriages end in divorce.  These odds aren’t great for couples starting their married life together, which is why a prenuptial agreement can be a valid consideration for many couples.

While your prenuptial agreement may be in place to protect both parties in the event that the marriage breaks down, it can have a serious affects on how your assets are dealt with after your death.  In this article, the Wills & Estate team at Hentys Lawyers explain how a prenuptial agreement may affect your will.

What is a Prenuptial Agreement?

A Prenuptial Agreement is a document that sets out exactly how your property will be divided if your relationship breaks down.  The agreement is usually made before a marriage, but can be made before, during or after the relationship and can refer to either a marriage or a de facto relationship.  The types of things that may be protected by a prenuptial agreement include money, property, business assets, trusts, investments, an entitlement to an inheritance and superannuation.

The agreement is made between partners, identifying how property is to be divided.  In the event of separation, the assets and liabilities are divided according to the terms of the agreement, which prevents the Family Courts from getting involved.  In order to be legally binding, the prenuptial agreement has to comply with strict legal requirements, otherwise it may not be upheld.

When May a Prenuptial Agreement Be Appropriate?

There are many circumstances where a Prenuptial Agreement may be an appropriate option for a couple, for example:

  • At the start of the relationship, one of the parties had much more property than the other
  • One of the parties is likely to inherit a significant sum or gift
  • The partnership is a second relationship, and children from the previous relationship need financial protection
  • Both parties want to ensure the terms of any property division are agreed up front and they will not end up in court

Prenuptial Agreements & Your Will

Due to the way Prenuptial Agreements are written, they will often be the overriding document upon death.  The main reason for this is that the Prenuptial Agreement has been made as a legal contract between partners, and the contract is still binding if one party of the agreement is still alive.

However there are a few events that may offset the legal advantages that a prenuptial agreement has over a will. For example:

  • The Prenuptial Agreement is ruled to be unenforceable by a court. This can happen if the court deems that the contract was made by a party under a state of duress, or if the agreement is perceived to be grossly unfair to one of the parties.
  • The Prenuptial Agreement is only valid for a certain amount of time. If the Prenuptial Agreement has expired, then the will takes priority.

Prenuptial Agreements & Intestacy

A prenuptial agreement may be used to distribute the estate if one partner dies intestate.  Intestacy is when a person dies without a will or estate plan or the will that they made was later found to be invalid.  In most cases, if a person dies intestate, the probate court will apply relevant state law to decide how their property is distributed. However, as the prenuptial agreement is a contract that deals with the person’s property, and has been made while the deceased person was alive, the court may use the prenuptial agreement to distribute the property of the deceased.

When disputing a Will or Estate the law can be difficult to understand, particularly in cases where family situations and relationships are complex.  The best thing you can do to ensure your assets are protected and you are provided for is to seek legal advice from a professional. Speak to one of our experienced Inheritance Lawyers for more information.

Alternatively, if you have any queries, our Contesting a Will FAQs are a great place to start.