What Is Prenuptial Agreement in Australia | Legal Guide

What Is a Prenuptial Agreement in Australia | Legal Guide

Getting married is one of life’s biggest decisions. But alongside choosing venues and writing vows, there’s a conversation many couples avoid: money.

Bringing up a prenuptial agreement might feel like planning for failure before you’ve even started. Yet having honest financial discussions before marriage is one of the healthiest things you can do for your relationship.

In Australia, prenuptial agreements are called Binding Financial Agreements (BFAs). These legal contracts outline how you’ll divide assets and finances if your marriage ends. Whether you’re protecting a family business, safeguarding an inheritance for your children, or simply seeking financial clarity, understanding how prenuptial agreements work is essential.

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Key Takeaways

• Prenuptial agreements in Australia are legally binding contracts called Binding Financial Agreements under the Family Law Act 1975
• Both parties must receive independent legal advice from Australian lawyers for the agreement to be valid
• They can protect premarital assets, specify how property is divided, and outline spousal maintenance arrangements
• Courts can set aside agreements if they’re unconscionable, involve fraud, or lack proper disclosure
• Costs typically range from $5,000 to $10,000+, depending on complexity

What Exactly Is a Prenuptial Agreement?

A prenuptial agreement is a written contract that you sign before getting married, outlining how your assets, debts, and finances will be handled in the event of separation or divorce.

Under Australian law, these agreements are formally known asBinding Financial Agreements and are governed by the Family Law Act 1975. While the term “prenup” suggests they’re only for couples planning to marry, you can actually enter into similar agreements at three different stages: before marriage, during marriage, or after separation.

The purpose of a prenup is straightforward: it gives both partners certainty about their financial future. Instead of leaving property division up to the courts if things don’t work out, you decide together (when you’re on good terms) how assets will be split.

This is particularly important if you’re entering a second marriage with children from a previous relationship, own significant assets or a business, or there’s a substantial wealth gap between partners.

What Does a Prenuptial Agreement Cover?

A well-drafted prenup addresses the financial side of your relationship in detail. Here’s what these agreements typically include:

Asset Division

Your prenup specifies how assets acquired before and during marriage will be divided. This covers property, investments, superannuation, business interests, intellectual property, and even digital assets. It protects what you owned before marriage while also clarifying how shared property will be handled.

The agreement can distinguish between individual and marital property, ensuring you retain control over assets you brought into the relationship.

Debt Allocation

Prenups protect you from becoming liable for your partner’s debts. If one person enters the marriage with student loans, credit card debt, or business liabilities, the agreement clearly states each person’s responsibility for these obligations.

This prevents one partner from being unfairly burdened with debts they didn’t create.

Spousal Maintenance

The agreement can outline whether spousal support will be paid, how much, and for how long. This is especially relevant if one partner plans to leave their career to raise children or if health issues might require long-term financial assistance.

Property Ownership and Inheritance Rights

Your prenup clarifies which properties remain separate and which become marital assets. Crucially, it can protect inheritances intended for children from previous relationships, ensuring family wealth passes down as intended rather than being divided in a divorce.

What a Prenuptial Agreement Can’t Include

While prenups cover financial matters, Australian law places strict limits on what they can dictate.

Child Custody and Support

Courts always determine custody arrangements based on the child’s best interests at the time of separation, not what a prenup says. Even if your agreement outlines custody expectations, judges may override these provisions to protect the welfare of the children.

Unreasonable Personal Clauses

Clauses imposing behavioural conditions (like weight maintenance, household chores, or lifestyle restrictions) are unenforceable. The courts won’t uphold agreements that attempt to control personal behaviour unrelated to finances.

Waivers of Fundamental Rights

Provisions that completely waive rights to spousal maintenance or leave one party in severe financial hardship may not be enforceable. Courts can override clauses that are unconscionable or extremely one-sided.

Understanding these limitations ensures your prenup focuses on what matters: fair financial arrangements that will hold up in court.

How to Create a Legally Binding Prenuptial Agreement

According to theFederal Circuit and Family Court of Australia, you must obtain independent legal advice before entering into a binding financial agreement. This isn’t optional — it’s a legal requirement.

Here’s the step-by-step process:

1. Negotiate Terms Together

Both partners discuss what should be included, often over multiple conversations. This stage involves identifying priorities, sharing financial information, and working through concerns openly.

2. Full Financial Disclosure

Each person must disclose all assets, debts, income, and financial resources completely and honestly. Hiding assets or misrepresenting your financial position can invalidate the entire agreement later.

3. Seek Independent Legal Advice

Both parties must consult separate family law solicitors. Your lawyer explains how the agreement affects your rights, its advantages and disadvantages, and whether the terms are fair. Your lawyer then signs a certificate confirming they’ve provided this advice.

4. Draft the Agreement

A solicitor prepares a formal document that incorporates the agreed-upon terms. The drafting must comply with strict requirements under sections 90G (for married couples) and 90UJ (for de facto couples) of the Family Law Act.

5. Review and Revise

Both parties review the draft agreement with their lawyers. Changes may be made to ensure clarity and fairness before finalising.

6. Sign the Agreement

The prenup must be signed before the wedding to be valid. It’s best to complete this process well in advance — signing just before the wedding can lead to claims of pressure or duress, which might invalidate the agreement.

The family court isn’t involved in creating your prenup, but they will scrutinise whether it meets legal requirements if it’s ever challenged. For an agreement to withstand court scrutiny, it must be fair, reasonable, and entered into voluntarily by both parties.

Weighing the Benefits and Drawbacks

Prenuptial agreements aren’t for everyone. Before deciding, consider both sides carefully.

Benefits

• Financial Protection: Your prenup safeguards assets you owned before marriage, preserving your financial independence and long-term security.
• Clarity and Reduced Conflict: Clear financial expectations from the start mean fewer arguments about money during the marriage and less litigation if you separate.
• Business Protection: If you own a business or expect to inherit one, a prenup shields these assets from being divided in a divorce.
• Protection for Children: Second marriages particularly benefit from prenups, as they can protect assets intended for children from your first relationship.
• Peace of Mind: Addressing finances upfront lets you focus on building a strong relationship without worrying about potential financial disputes.

Drawbacks

• Difficult Conversations: Discussing a prenup can be emotionally uncomfortable and may lead to hurt feelings if not handled sensitively.
• Perceived Lack of Trust: Your partner might interpret the request as a sign you doubt the marriage will last or don’t trust them with finances.
• Legal Costs: Creating a legally sound prenup costs between $5,000 and $10,000+, depending on complexity.
• Risk of Becoming Outdated: Life changes can make your prenup irrelevant if you don’t review and update it regularly.
• Enforceability Uncertainty: Despite meeting all requirements, prenups can still be challenged in court under certain circumstances.

The key is approaching the conversation with honesty and empathy. Frame it as protecting both partners and ensuring fairness, not as questioning the relationship’s strength.

When Courts Can Set Aside Your Prenuptial Agreement

Even a properly executed prenup isn’t guaranteed to stand forever. Courts have the power to set aside binding financial agreements under certain circumstances.

Your agreement may be challenged if:

• Fraud or Duress: One party was pressured into signing, didn’t receive independent legal advice, or was deceived about the other’s finances
• Unconscionable Conduct: The agreement is so unfair to one party that enforcing it would be unconscionable
• Material Non-Disclosure: Assets or liabilities weren’t fully disclosed when the agreement was signed
• Significant Change in Circumstances: Major life changes—like the birth of children not anticipated in the agreement, serious illness, or dramatic financial shifts—may make terms impractical
• Technical Non-Compliance: The agreement doesn’t meet the strict legal requirements of the Family Law Act

According toAustralian Bureau of Statistics data, the median duration from marriage to divorce in 2024 was 13.2 years. This long timeframe means circumstances can change substantially between signing a prenup and potentially needing to rely on it.

To minimise the risk of your prenup being set aside, work with experienced family law solicitors who understand the technical requirements, be completely transparent about finances, ensure both parties genuinely consent without pressure, and review the agreement every few years or after major life events.

How Much Does a Prenuptial Agreement Cost?

Legal fees for prenups vary based on several factors:

• Asset Complexity: More properties, businesses, or investment portfolios mean more detailed agreements and higher costs
• Negotiation Time: Extensive back-and-forth discussions to finalise terms increase legal expenses
• Lawyer Experience: Specialist family law solicitors may charge higher rates but provide better protection
• Potential Disputes: If one party contests terms during drafting, costs can escalate quickly

On average, expect to pay between $5,000 and $10,000 for a standard prenup. Complex situations involving multiple businesses, trusts, or international assets can cost significantly more.

While this may seem expensive, it’s substantially less than the legal costs associated with disputed property settlements following separation. Those working with experienceddivorce solicitors know that contested property matters can easily cost tens of thousands of dollars or more.

Should You Get a Prenuptial Agreement?

Prenups make particular sense in specific situations:

• You own significant assets, property, or a business before marriage
• There’s a substantial wealth difference between partners
• You’re entering a second marriage and want to protect assets for children from your first relationship
• You expect to receive a large inheritance or family business
• One partner has substantial debts you want to keep separate
• You’re marrying someone from a different country with different property laws

Even if none of these apply, a prenup can provide clarity and peace of mind. For those inde facto relationships, similar binding financial agreements are available and equally important, as de facto partners have the same property rights as married couples under Australian law.

Protect Your Financial Future

A prenuptial agreement is a tool for financial clarity, asset protection, and conflict prevention. When properly drafted by experienced solicitors, it provides both partners with certainty about their financial future.

The key to a successful prenup is approaching it as a joint decision that benefits both of you, not a one-sided protection strategy. Open communication, full disclosure, and fair terms create agreements that stand the test of time.

If you’re considering a prenuptial agreement in Cairns, speaking with a family law specialist ensures your agreement meets all legal requirements and protects your interests. We can guide you through the process, explain your rights and obligations, and help you create an agreement that’s fair, binding, and tailored to your situation.