Prenuptial agreements in Australia

What a prenup can and cannot cover

A binding financial agreement can deal with how property, superannuation and spousal maintenance are divided if the relationship ends. It is most useful where one party brings substantially more into the relationship, where there is a business, an inheritance, or children from an earlier relationship whose position needs protecting.

• Can cover: division of property and superannuation, spousal maintenance, and how assets acquired during the relationship are treated.
• Cannot cover: parenting arrangements. A court decides what is in a child’s best interests, and no agreement can bind it on that.
• Cannot cover: child support in a way that displaces the statutory scheme, unless it meets the separate requirements for a binding child support agreement.

The requirements that actually matter

Most agreements that fail do so on the formalities rather than the substance. The Act is unforgiving about them.

1. The agreement is in writing and signed by both parties.
2. Each party receives independent legal advice from a different lawyer, before signing, about the effect of the agreement on their rights and whether it is to their advantage.
3. Each lawyer signs a statement confirming that advice was given.
4. A copy of each signed statement is given to the other party.
5. The agreement has not been terminated or set aside by a court.

The independent advice requirement is not a formality to be rushed the week of the wedding. Both parties having the same lawyer, or one party signing without advice because they trust the other, is the single most common reason these agreements collapse.

When a court will set one aside

Section 90K gives the court power to set aside a binding financial agreement. The grounds worth knowing about are these.

• Non-disclosure. If a party did not disclose a material asset, the agreement is vulnerable. This is the most common ground by a distance.
• Duress or undue influence. Presenting an agreement days before the wedding, when cancelling would be humiliating and expensive, has been found to amount to this. The High Court considered exactly that situation in Thorne v Kennedy in 2017 and set the agreements aside.
• Unconscionable conduct. Where one party was at a special disadvantage, for example limited English, no financial literacy, or visa dependence, and the other took advantage of it.
• Change affecting a child. Where circumstances relating to a child of the relationship have changed such that a party would suffer hardship if the agreement were enforced.

The practical lesson from Thorne v Kennedy is timing and fairness. An agreement negotiated well before the wedding, with full disclosure and genuine advice on both sides, is far more likely to hold than one signed under time pressure.

Timing, and the mistake almost everyone makes

Start at least three months before the wedding. That is not a legal requirement, it is a practical one. Both parties need time to disclose their positions, get separate advice, negotiate, and sign without anyone feeling cornered.

An agreement produced two weeks out, when the venue is paid for and the flights are booked, carries the exact fact pattern a court looks for when considering duress. Doing it early is not only kinder, it is what makes the document worth having.

Agreements can also be made during a marriage under section 90C, or after separation under section 90D. If you are already married and wish you had done this earlier, it is not too late.