Are Prenuptial Agreements Binding?

Yes. Since December 2000, Australian law has enabled parties who are to be married, to enter into Prenuptial Agreements (known as Financial Agreements) that provide for how assets will be divided if the marriage later breaks down.

Provided the legal requirements are met and the Agreement is not later set aside, Prenuptial Agreements are enforceable in Australia.

What can Prenuptial Agreements cover?

Prenuptial Agreements can deal with property division and also spouse maintenance. They can take into account anticipated changes such as children being born and the length of a marriage, by providing for different asset splits, depending on how long the marriage lasts, how big the asset pool is, or how many children are born to a couple.

You cannot, however, enter into a Prenuptial Agreement that purports to make arrangements for where children should live if a marriage breaks down, how often they will have contact with a parent, or how much child support will be paid. Parenting and child support matters depend on the best interests of a child. You cannot "contract out" of those matters.

What about Prenuptial Agreements made before December 2000?

The legislation introducing Prenuptial Agreements in December 2000 was not retrospective. That means, if you entered into a Prenuptial Agreement before that date, it is not enforceable and will not prevent the Family Court making Orders about property division and spouse maintenance.

If you have an old Prenuptial Agreement, you should contact one of our accredited family law specialists about drafting an updated and enforceable Agreement.

What if we are already Married. Can we enter into a Financial Agreement now?

Yes. The Australian law is unique, in that it allows couples who are already married to enter into a binding Financial Agreement, that provides for how assets are to be divided if the marriage later breaks down. Both husband and wife must consent to the Financial Agreement's terms and be independently legally advised.

Can De Facto Couples make Binding Financial Agreements about what happens if they Separate?

Yes. Whilst de facto couples in NSW are not governed by the Family Law Act, there is State law in NSW that enables them to enter into binding documents called Domestic Relationship Agreements, that have the same effect as Prenuptial Agreements do for married couples.

De facto couples in most Australian States can make a binding Agreement about how their assets will be divided if their de facto relationship breaks down and they separate.

Each de facto partner must receive independent legal advice before entering into a Domestic Relationship Agreement in NSW, and it is important there is full disclosure of all assets owned by each party.

Other Australian States and Territories have individual laws that apply to de facto couples. If you live in a State or Territory other than NSW and are either in, or contemplating a de facto relationship, we can either advise you about the State law that applies to you, or refer you to an accredited family law specialist in that State or Territory.

Can Prenuptial Agreements be set aside?

Yes. The Family Court has powers to set aside Prenuptial Agreements where either they do not comply with the Family Law Act or there has been some fraud, undue influence or non-disclosure at the time the Agreement was made.

The Court can also set aside a Prenuptial Agreement if there is a material change in the welfare of the children and it would cause a hardship to enforce the strict terms of a Prenuptial Agreement. For example, a Prenuptial Agreement might provide that on separation, a wife gets no assets and the husband keeps all assets in his name. If, at separation, the wife is caring for several children and has no income or assets, the Court is likely to set aside the Prenuptial Agreement as causing hardship to the wife and children.

If a Prenuptial Agreement is set aside, the Court's general powers to alter property interests and order spouse maintenance then applies. This could obviously result in Orders being made, far less favourable to a party than what the Prenuptial Agreement provided for.

Why should I consider a Prenuptial Agreement?

Not everyone will be interested in Prenuptial Agreement, whether for personal, religious or other reasons. As long as an informed choice is made, it is a matter for personal decision making.

In our experience, the category of clients who can benefit from Prenuptial Agreements include:

• Where one party has significant assets they want to protect;
• Where there is the likelihood of receiving an inheritance during the marriage;
• Where one party owns or operates a farm or business they want to exclude from claims;
• Where one party is on their second or third marriage and needs to protect the financial position of children of earlier marriages.

What is involved in preparing a Prenuptial Agreement?

Our accredited family law specialists at Barkus Doolan Kelly are very experienced in drafting and negotiating Prenuptial Agreements for married couples, and Domestic Relationship Agreements for de facto couples.

It is essential that each party gives a full and frank disclosure of their financial position, and that each party has independent legal advice. Whilst we can prepare the Prenuptial Agreement and advise you, we cannot advise or act for your spouse or partner, as they will need to consult a lawyer at another firm.

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