Thinking about a pre-nuptial agreement before getting married can feel like an awkward conversation to have. Many couples avoid the topic altogether, not wanting to introduce doubt into what is supposed to be a happy chapter in their lives. But for people who are entering a marriage with significant assets, a business, an inheritance, or children from a previous relationship, a pre-nuptial agreement can be one of the most sensible and caring things both parties can do.
The key is understanding what these agreements actually are under Australian law, what makes them enforceable, and why specialist legal advice is not just recommended but essential.
What Is a Pre-Nuptial Agreement Under Australian Law?
Pre-nuptial agreements have been legally recognised in Australia since 2001. Under the Family Law Act, they are formally referred to as Binding Financial Agreements, or BFAs. Despite the American term being more widely used in everyday conversation, the legal framework in Australia is quite different from what many people imagine.
A Binding Financial Agreement is a contract between two people that sets out how assets, liabilities, and financial resources will be dealt with if the relationship breaks down. These agreements can be made before a marriage, during a marriage, or after separation. They can also be made by couples in de facto relationships, not just married couples.
Unlike consent orders, a BFA does not need to be approved by a court to take effect. However, for it to be binding and enforceable, very specific legal requirements must be met. The most critical of these is that both parties must receive independent legal advice from a qualified lawyer before signing. This is not a formality. It is a strict requirement, and agreements that have been prepared without it have been set aside by Australian courts. If you are considering pre-nuptial agreements, working with a specialist family lawyer from the outset is the only way to ensure the agreement will hold up if it ever needs to be relied upon.
Why Australian Courts Have Set Some Agreements Aside
Australia does not have a long history of pre-nuptial agreements in the way that the United States does, and the courts have shown a willingness to challenge agreements that do not meet the required standard. Over the years, a number of BFAs have been set aside for a range of reasons, including inadequate legal advice, undue pressure on one party to sign, agreements that were fundamentally unfair to one party, or technical errors in how the agreement was drafted.
This is why many law firms choose not to prepare these agreements at all. They are technically complex, carry legal risk for the drafting lawyer, and require a level of expertise that goes beyond general family law practice. The evolution of case law in this area has made them more nuanced than ever, with recent court decisions continuing to shape what the courts will and will not accept.
For anyone seeking to prepare or review a Binding Financial Agreement, this makes choosing the right legal representation particularly important. An experienced pre-nuptial agreements lawyer will not only draft the agreement correctly but will also give you a realistic picture of how it is likely to be treated if it is ever contested.
What a Pre-Nuptial Agreement Can and Cannot Cover
A well-drafted BFA can cover a wide range of financial matters, including how property will be divided if the relationship ends, what happens to assets each party brought into the relationship, how inheritances or gifts received during the marriage will be treated, and whether either party will receive spousal maintenance.
There are, however, things a BFA cannot do. It cannot make binding decisions about parenting arrangements or child support, as these matters are always determined with reference to the best interests of the children at the time of separation, regardless of any prior agreement. It also cannot override the law in ways that would leave one party in a position of serious disadvantage or hardship.
This is particularly relevant when one party has significantly fewer financial resources than the other, or when circumstances change substantially over the course of the relationship. Courts retain the power to set aside agreements in these situations, which is why the content of the agreement needs to be carefully considered in light of both parties’ current and likely future circumstances. A lawyer with expertise in property and financial settlements will be able to identify potential vulnerabilities in a proposed agreement and advise on how to address them.
Pre-Nuptial Agreements Are Not Just for Married Couples
One aspect of Australian law that many people are not aware of is that Binding Financial Agreements are available to de facto couples as well as married ones. If you are moving in with a partner, or if your de facto relationship is becoming more serious, it is possible to put a financial agreement in place that sets out how your assets would be dealt with if the relationship were to end.
De facto relationships carry significant legal obligations in Australia. After two years of living together, or sooner in certain circumstances such as having a child together, both parties generally have rights to make claims against each other’s assets. If you have a business, a property, or assets you wish to protect, speaking to a lawyer about de facto relationships and financial agreements is a sensible precaution to take early, rather than waiting until a dispute arises.
Speaking to a Specialist Before You Commit to Anything
Just Family Law is one of the few specialist family law firms in Melbourne that continues to provide advice on Binding Financial Agreements. With more than 25 years of experience across all areas of family law, the team has developed the expertise needed to prepare these agreements correctly and to advise clients on both sides of the process, including situations where a client is seeking to have an existing agreement set aside.
If you are considering a pre-nuptial agreement, or if you have been asked to sign one and want to understand your rights and obligations, the best thing you can do is get proper advice before signing anything. The team at Just Family Law offers a free 15-minute phone consultation to help you understand your situation and decide on the right next steps.
You can reach them at their Malvern office on (03) 9650 1615 or their Dandenong office on (03) 9793 7888.