A binding financial agreement, often called a prenup, is a written agreement between a couple about how their property, finances and superannuation will be divided if the relationship ends. It is made under the federal Family Law Act 1975 (Cth) and applies to married and de facto couples across Australia. Done properly, it lets a couple decide these questions themselves instead of leaving them to a court.
When can you make one?
- Before marriage or before living together. This is the classic prenup.
- During the relationship. Couples sometimes sign one after an inheritance, a business purchase or a move to Australia.
- After separation or divorce. A separation agreement can finalise a property settlement without court orders.
Who usually signs one?
- People bringing significant property, a family business or family wealth into a relationship.
- People who expect a large inheritance or are beneficiaries of a family trust.
- People marrying for a second time who want to protect assets for children from an earlier relationship.
- Couples with assets in more than one country, where it is worth agreeing in advance which assets are separate.
What makes it binding?
The Act sets strict requirements. The agreement must be in writing and signed by both parties. Before signing, each party must receive independent legal advice from their own lawyer about how the agreement affects their rights and its advantages and disadvantages. Each lawyer signs a statement confirming that advice was given, and copies are exchanged. If any of these steps is missed, the agreement may not be binding at all.
Full and honest financial disclosure is essential. Since 10 June 2025, the duty of disclosure in property matters is written into the Family Law Act itself.
When can a court set it aside?
A court can set aside a financial agreement in limited circumstances, including:
- fraud, including failing to disclose a significant asset or debt;
- duress, undue influence or unconscionable conduct, for example pressure to sign shortly before the wedding;
- circumstances arising that make the agreement impracticable to carry out;
- a material change in circumstances relating to the care of a child, causing hardship.
The High Court has set aside a prenup signed days before a wedding where one party had no real choice. Signing well before the wedding, with time to negotiate, is the best protection.
Advantages and disadvantages
- Advantages: certainty, privacy, lower legal costs if the relationship ends, and protection of family assets and businesses.
- Disadvantages: the cost of two lawyers, difficult conversations, and the risk that an agreement becomes unfair years later as circumstances change. It should be reviewed after major life events such as children or a move overseas.
Superannuation and spousal maintenance
An agreement can deal with superannuation, but the fund trustee must be given proper notice for a super split to work. It can also deal with spousal maintenance, although a court can still intervene if a party could not support themselves without relying on a government pension.
Assets overseas
An Australian financial agreement may not be recognised automatically in Hong Kong, mainland China, Singapore, Malaysia or elsewhere. Where significant assets are overseas, consider local advice and, sometimes, a matching agreement in that country.
The process
- Each party lists their assets, debts, income and superannuation.
- One lawyer drafts the agreement; the other reviews and negotiates it.
- Each party receives independent advice and signs, with the lawyers’ certificates.
- The original is kept safely, and the agreement is reviewed after major changes.
Related reading
Chua Tan Associates prepares and advises on financial agreements for couples across Australia, including couples with assets and family overseas. To arrange a confidential consultation, please contact our Melbourne office on +61 3 9602 3988 or submit an enquiry. Advice is available in English, Mandarin and Cantonese.
Justin Chua (蔡智勋), lawyer and mediator, Chua Tan Associates, Melbourne. General information only, not legal advice. Federal family law applies across Australia; Western Australia has its own family court legislation for de facto couples, and state laws differ for Wills.
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