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Who says romance is dead? Section 21 Agreements ("pre-nups")

By Tara Hurley - 10 Oct 2014

Section 21 agreements, often referred to as "pre-nups" are now common place. They are an important tool in an estate planning lawyer's tool kit and are not just for the paranoid, rich and famous, as perhaps once thought. Having an agreement in place can bring certainty around issues of property sharing and division. It can allow couples to get on with the more romantic aspects of their relationship, without worrying about property entitlements.

assetprotectionumbrellaWhat is a section 21 agreement?

It is an agreement entered into under the Property (Relationships) Act 1976. It allows parties to a relationship, or those contemplating entering into a relationship, to contract out of the Act. Couples can make any agreement they think fit with respect to the status, ownership and division of property.

Who uses section 21 agreements?

  • Ordinary young couples, particularly when one party might be borrowing money from family for the deposit on that first home.
  • Couples who have been there and done it all before and just want to keep property and finances out of the picture and focus on companionship.
  • Couples where one or both have a child from a prior relationship and there is a need/desire to identify property for the protection of that child.

What's involved?

The agreement must meet certain criteria to be binding. One of the requirements is that each party must be advised by their own lawyer. The lawyer needs to go beyond a mere explanation of the agreement and advise on the merits and wisdom of signing (or not signing) the agreement as it relates to each person's individual circumstances. Specialist advice from a lawyer with expertise in relationship property law is a must if you want the agreement to stand up.

Tara Hurley is our section 21 agreement expert. She has recently returned from maternity leave, raising her twin girls. If you want to talk to Tara about whether a section 21 agreement is right for you and your relationship then feel free to call her for an initial chat.

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Tara Hurley

 

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