In Australia, a prenuptial agreement takes the form of a Binding Financial Agreement entered into before marriage under section 90B of the Family Law Act 1975. While the term "prenup" is commonly used, the legal framework governing these agreements is the same as for all BFAs. Reid+Alexander Lawyers assist couples who wish to establish clear financial arrangements before they marry, providing peace of mind and protecting the interests of both parties.
What Is a Prenuptial Agreement in Australian Law?
A prenuptial agreement is a Binding Financial Agreement made between two people who are contemplating marriage but have not yet married. It sets out how their property, financial resources, and spousal maintenance will be dealt with in the event the marriage breaks down.
Under Australian law, prenuptial BFAs can address a wide range of financial matters, including:
- Assets each party brings into the marriage, including real property, savings, investments, and personal property
- Business interests, shares, and partnership entitlements
- Superannuation balances and how they will be treated upon separation
- Inheritances received before or anticipated during the marriage
- Liabilities and debts of each party
- Spousal maintenance arrangements or waivers
The agreement takes effect upon marriage and continues to operate unless it is terminated or replaced by a subsequent BFA.
Why Consider a Prenuptial Agreement?
There are many legitimate reasons why couples choose to enter into a prenuptial BFA. Far from being a sign of distrust, a prenuptial agreement reflects a mature and practical approach to financial planning. Common reasons include:
- Significant disparity in assets: Where one party enters the marriage with substantially more wealth than the other, a prenuptial agreement can protect those pre-existing assets.
- Business protection: If one party owns a business or holds shares in a family company, a prenuptial agreement can ring-fence those interests from any future property settlement.
- Second marriages: Parties entering a second or subsequent marriage often wish to preserve assets for children from a previous relationship.
- Family wealth and trusts: Where family trusts or inherited assets are involved, a prenuptial agreement can ensure those assets remain within the family.
- Certainty and clarity: Both parties benefit from knowing in advance how financial matters will be resolved, reducing the potential for costly disputes.
A prenuptial agreement should be discussed and prepared well in advance of the wedding. Agreements signed under time pressure or shortly before the ceremony may be vulnerable to challenge on the grounds of duress or unconscionability.
The Process of Entering a Prenuptial Agreement
At Reid+Alexander Lawyers, we guide you through each stage of preparing a prenuptial BFA:
- Initial consultation: We discuss your financial circumstances, your objectives, and any concerns you have about entering a prenuptial agreement.
- Financial disclosure: Both parties must make full and frank disclosure of their financial positions. We help you prepare a comprehensive asset and liability schedule.
- Drafting the agreement: We prepare the BFA, tailoring the terms to reflect your agreed arrangements and ensuring compliance with the Family Law Act.
- Independent legal advice: Each party must receive independent legal advice from their own solicitor. We provide this advice and issue the required solicitor's certificate.
- Execution: Both parties sign the agreement, along with the annexed solicitor's certificates, bringing the BFA into effect.
Can a Prenuptial Agreement Be Set Aside?
While a properly prepared prenuptial BFA is legally enforceable, there are circumstances in which a court may set aside the agreement. These include situations where:
- The agreement was obtained by fraud, including non-disclosure of material financial information
- A party entered the agreement under duress or undue influence
- The agreement is void, voidable, or unenforceable under contract law principles
- Circumstances have changed materially since the agreement was made, making it impracticable to carry out the terms
- A party to the agreement engaged in unconscionable conduct
"A prenuptial agreement is an investment in certainty. When properly prepared, it provides a clear framework for financial resolution and avoids the cost and emotional toll of contested proceedings."
If you are considering a prenuptial agreement, contact Reid+Alexander Lawyers to discuss your options in a confidential setting.