Financial Agreements and Prenuptial Agreements

Since one in three marriages are likely to end in divorce, pre-nuptial agreements are used to prevent disputes and add complete certainty.


Financial agreements are agreements that couples enter into to specify how their property will be distributed should the relationship end. Agreements entered into before or during the relationship are commonly referred to as prenuptial agreements. Financial agreements can be entered into by same-sex, de facto, or married couples, at any stage of a relationship: whether that is before, during or after a relationship.

The certainty of prenuptial agreements make them a welcomed and useful document in all Family Law matters.

Legal Costs

The cost of a financial agreement depends on the complexity of the agreement and the time required to draft it. Should the parties agree to fair and reasonably simple terms, the cost of a prenuptial agreement is usually low.

Further costs associated with Court fees and expenses may arise in circumstances where a party to a prenup challenges its validity and enforceability.

Expiry and Validity

Under Australian law, financial agreements do not expire. They can even continue after one party to the agreement passes away. However, a financial agreement can be set aside by a Court or be terminated at any time should the parties agree to do so. 

The date at which the agreement is signed is also a relevant consideration. Couples can enter into a  financial agreement before marriage, during a marriage (including the time a couple is separated but not divorced under law) and after divorce.

Financial agreements may be entered into before or during a de facto relationship, as well as post-separation.


Financial agreements are enforceable provided they comply with the legal requirements set out in the Family Law Act 1975 (Cth) (“the Act“) and the principles established by case law.

The Act provides that a prenup will be binding if, and only if:

  1. It is signed by all parties;
  2. Before signing it all parties to the agreement sought independent legal advice as to the legal effect of the agreement;
  3. Signed statements are provided by the independent legal practitioners of each party stating that advice was given in relation to the financial agreement;
  4. The statements of each of the independent legal practitioners are provided to the other parties; and
  5. It has been terminated and has not been set aside by a Court.

What happens if you do not have a prenup?

If a couple does not have Financial Agreement, the Family Law Act 1975 will govern asset division. Section 79(4) of the Family Law Act 1975 provides that the Court will take into account Financial contributions made directly or indirectly, other contributions, and contributions to familial welfare.

Can my assets be protected without prenuptial agreement?

A Financial Agreement can trump the jurisdiction of the Court, as stipulated by the Family Law Act. An agreement can circumvent the costs and uncertainty stress associated with court proceedings. 

Frequently Asked Questions

Do I need a prenuptial agreement?

A prenuptial agreement is not obligatory on couples. However, they possess significant benefits should the relationship irretrievably break down. 

Can couples who are married get a binding financial agreement?

The Family Law Act 1975 allows for people who are married to get a binding agreement. This allowance even extends to couples who have divorced.

What should a prenuptial agreement detail?

A binding financial agreement should include the following:

  • The assets, liabilities, superannuation and financial resources each party holds at the time of entering into the agreement.
  • How the parties intend to divide all your assets and liabilities as they exist at the time of the separation.
  • Whether either party should pay spousal maintenance to the other.