Honey, can you just sign this? How to ask for a mid-nup
You might be familiar with pre-nups, but what about a mid-nup? Here’s how to negotiate the financial terms of your marriage – without inadvertently initiating a divorce.
Given at least one in three marriages end in divorce in Australia – a figure that jumps to two in three when it’s a second marriage – it’s not surprising that prenuptial agreements, or pre-nups, are a relatively well-known “thing”.
While Canstar research says only 6 per cent of Australian couples have actually signed a pre-nup, a ME Bank survey found three quarters of us think they’re a fair idea.
But have you heard of a mid-nup agreement? Just like pre-nups, in legal speak a mid-nup is technically called a “binding financial agreement” – the difference is it’s signed mid-relationship, rather than at the start of one.
Talya Faigenbaum, the principal family lawyer at law firm Nest Legal, says, like a pre-nup, a mid-nup agreement is a “relationship exit strategy”.
“It means that if things don’t go to plan, you both have a road map out of the relationship, to allow for a much smoother transition to the next stage of your lives,” Talya says.
Is a mid-nup agreement right for your relationship?
While pre-nups can be a consideration when one or both people are bringing assets they want to protect into a relationship, mid-nups are designed to deal with assets or money acquired during the relationship.
“Often, when couples are starting out in a relationship, they haven’t acquired much wealth yet, so it’s not appropriate to do a pre-nup at that point, because there’s nothing to protect,” Talya says.
“But if you then build up your own business or you receive an inheritance or a monetary gift from your parents and you want to retain it or any assets you buy with it should the relationship end, a mid-nup can segregate and protect those assets.”
Why women may need a mid-nup
Talya says while either person in a relationship can instigate and benefit from a mid-nup agreement, they can be particularly important for women.
“Research shows that, compared to men, women – and particularly women who have spent time out of the paid workforce to care for and raise children – are often the most financially disadvantaged when a relationship breaks down,” she says.
“And the negative impact of this can continue for years after a separation.
“So a mid-nup can be there to take those financial worries away and allow women to feel sure that if it doesn’t work out, they’ve secured their financial future.”
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How to ask for a mid-nup agreement
With more than one in two Australian couples identifying “finances” as the biggest source of relationship conflict, you’re not alone if you suspect having the “mid-nup conversation” might be awkward.
“Clients do ask this,” Talya says. “Our response is always to say that difficult discussions are part of establishing respect in a relationship, and they’re really important to have.
“It’s about saying, ‘Well, at the moment we’re in a position where we want to do what’s right for each other, rather than waiting for a time when emotions may have been hurt, so we can avoid spending tens or even hundreds of thousands of dollars on lawyers or, worst case scenario, landing in family court’.”
Don’t avoid the f-word (finances, that is)
Relationship coach Debbie Rivers says, as a rule, couples should be talking more about finances full stop.
“Unfortunately, money is an issue that’s often avoided or is simply overlooked by many couples, which is concerning considering finances are something no one should ever be complacent about,” Debbie says.
Debbie’s advice for raising the topic?
“I’d recommend having any conversation about money when you’re both calm and to take it slowly, recognising that your partner may need time to get on to the same page as you and, at least to start with, may not immediately understand where you’re coming from.”
How to make your mid-nup legal
Talya adds it’s important to remember that formalising a mid-nup agreement – the starting price for which she says is typically around $3500 – not only involves negotiation, it also requires both parties receiving independent legal advice before anything is signed.
She also recommends avoiding DIY options you might find online.
“You do see a lot of do-it-yourself agreements on the internet and honestly, most of the time, they’d be better off used as a sandwich wrapping,” Talya says.
“Approaching a family lawyer, who understands the principles involved and can comprehensively construct and negotiate agreements like this, should always be the first step.”
Written by Karen Fittall.
