What Is a Prenuptial Agreement: Practical Advice for Couples

What Is a Prenuptial Agreement: Practical Advice for Couples

Around 32% of Australian marriages end in divorce. But here’s what most couples don’t realise – having honest conversations about finances before marriage actually strengthens relationships, not weakens them.

A prenuptial agreement (legally called a Binding Financial Agreement in Australia) isn’t about planning for divorce. It’s about building financial transparency and trust from day one.

Quick Answers

• In Australia, prenups are called Binding Financial Agreements (BFAs) and are governed by the Family Law Act 1975
• Both partners must get independent legal advice before signing – this is a legal requirement, not optional
• They protect individual assets, manage debt, and outline financial arrangements if the relationship ends
• BFAs can be made before, during, or even after separation (not just before marriage)
• They’re not just for wealthy couples – anyone with assets, debt, or children from previous relationships should consider one
• Costs typically range from $2,500 to $10,000+, depending on complexity

What Is a Prenuptial Agreement in Australia?

In Australia, we don’t technically have “prenuptial agreements” like you see in American movies. What we have are Binding Financial Agreements (BFAs), which work similarly but with stricter legal requirements.

A BFA is a legal contract between you and your partner that sets out how you’ll divide your assets, property, superannuation, and debts if your relationship ends. According to the Family Law Act 1975, these agreements can be made before you get married, while you’re married, or even after you’ve separated.

Here’s what makes Australia different: both married couples and de facto couples (including same-sex relationships) can enter into BFAs. And unlike casual agreements, BFAs are legally enforceable – provided they meet specific requirements.

The Myths That Stop Couples Having Important Conversations

Let’s clear up some common misconceptions that prevent couples from protecting themselves financially.

1. “Prenups are only for rich people”

This is the biggest myth. You don’t need millions in the bank to benefit from a BFA. If you’re bringing any of these into your relationship, a prenup makes sense:

• Student debt or credit card liabilities
• An inheritance you want to protect for your children
• A small business you’ve built
• Property purchased before the relationship
• Superannuation you’ve been building for years

2. “Asking for a prenup means I don’t trust my partner”

Actually, it’s the opposite. Money troubles contribute to many relationship breakdowns. Research from the Australian Institute of Family Studies shows that 83% of couples now live together before marriage– most of us are already making joint financial decisions before we legally commit.

Having open conversations about money demonstrates maturity and respect. You’re building a financial plan together, not plotting an exit strategy.

3. “Prenups always favour one person”

Not in Australia. Courts can set aside agreements that are excessively unfair or one-sided. Both partners must receive independent legal advice before signing. This requirement exists precisely to prevent unfair agreements.

4. “Once we sign it, it can never be changed”

BFAs can be updated or replaced as your circumstances change – when you have children, receive an inheritance, or one partner takes time off work. Many couples review their agreement every few years to keep it relevant.

What Can (and Can’t) a Prenup Cover?

Your BFA can outline how you’ll handle:

• Property division – who keeps the house, investment properties, or family home
• Business interests – protecting a business you built before marriage
• Debt responsibility – if one partner has $50,000 in student loans, the prenup can specify that remains their sole responsibility
• Spousal maintenance – whether either partner will receive financial support after separation, and for how long
• Superannuation – how your retirement funds will be divided
• Inheritances – protecting family assets for your children from a previous marriage

Australian law has strict limits on what you can put in a BFA:

• Child custody or visitation – courts always decide what’s in the child’s best interest, regardless of any agreement
• Child support amounts – you can’t sign away a child’s right to financial support (though you can make a separate Binding Child Support Agreement for children who already exist)
• Illegal activities – any clause supporting unlawful behaviour will invalidate the entire agreement

Section 90E of the Family Law Act 1975 allows prenups to address child support only if the child has already been born and the exact maintenance amount is specified. But even then, courts can override it if it’s not in the child’s best interest.

When Should You Have ‘The Conversation’?

The best time to discuss a prenup is early – before you’re caught up in wedding planning stress.

Start the conversation when you’re:

• Talking seriously about moving in together
• Discussing buying property together
• Planning your financial future as a couple
• Considering marriage

Here’s the crucial part: don’t leave it until two months before your wedding. Courts may view this as evidence of undue pressure. If you’re already close to your wedding date, you can create a postnuptial agreement after you’re married.

Five Steps to Creating Your Prenup

Step 1: Start the Conversation Early

Give yourselves at least 6–12 months before your wedding. This removes any pressure and shows you’re both entering the agreement voluntarily.

Step 2: Full Financial Disclosure

Both partners must reveal everything – bank accounts, investment properties, debts, superannuation, business interests, and expected inheritances. Hiding assets will invalidate your entire agreement.

Step 3: Get Independent Legal Advice

You and your partner must each hire your own family lawyers (you cannot share the same lawyer).

Your lawyer will:

• Explain how the agreement affects your legal rights
• Outline the advantages and disadvantages for you specifically
• Assess whether the agreement is fair and reasonable
• Provide you with a certificate of independent legal advice

Step 4: Negotiate and Draft the Agreement

Your lawyers will work together to create an agreement that’s fair to both of you. This might involve several drafts and negotiations – that’s normal.

Step 5: Sign and Store Securely

Once both lawyers are satisfied, you’ll each sign the agreement in the presence of your lawyer. Keep the original in a safe place – you’ll need it if you ever separate. Many couples keep it with their important documents, like wills and property titles.

What Makes a Prenup Legally Binding in Australia?

For your BFA to hold up in court, it must meet specific requirements:

1. Written and signed – verbal agreements don’t count
2. Independent legal advice – both parties must have their own lawyers and exchange certificates proving they received advice
3. Full financial disclosure – complete honesty about all assets and debts
4. Voluntary – signed without pressure, threats, or duress
5. Fair and reasonable – courts can overturn agreements that are unconscionably unfair

Even with all these requirements met, courts can still set aside a BFA if:

• One partner committed fraud or hid significant assets
• Circumstances have changed dramatically (like the birth of a child not mentioned in the agreement)
• Carrying out the agreement would cause serious hardship
• One partner used unconscionable conduct or undue influence

What Will It Cost You?

Legal fees for a prenup typically range from $2,500 to $10,000 or more, depending on:

• Complexity of assets – multiple properties, businesses, or trusts increase costs
• Negotiation time – more back-and-forth between lawyers means higher fees
• Lawyer experience – experienced family law specialists charge more but often save you money in the long run
• Your location – lawyers in Cairns and Townsville often charge less than those in Sydney or Melbourne

Protecting Your Family’s Future

With 47,216 divorces granted in Australia in 2024and divorce rates sitting at 2.1 per 1,000 people, financial planning before marriage isn’t pessimistic – it’s practical.

Think of a prenup like insurance. You don’t buy home insurance planning for your house to burn down. You buy it because protecting what matters is responsible.

A well-structured BFA removes the financial uncertainty that can poison relationships. When you know your responsibilities and rights from the beginning, you can focus on building your life together rather than worrying about “what if.”

Need help creating a fair and legally sound prenup? Our experienced family lawyers in Cairns and Townsville understand the unique needs of North Queensland couples. We’ll guide you through the process with compassion and practical advice, ensuring both partners are protected.