Updated July 2026
Thinking about a “prenup”? The first thing to know is that the Australian Family Law system does recognise this type of agreement. The legal term is a Financial Agreement, commonly called a Binding Financial Agreement.
A well-prepared Financial Agreement can give you both clarity about property, debts, superannuation and financial support, such as spousal maintenance, in the event of your relationship ending. It may also reduce the uncertainty, cost and stress of a future property settlement dispute. However, the legal requirements are strict, and a rushed template or a signature obtained under pressure may not provide the protection you expect.
This guide explains what a prenup is, when you can make one, what it can cover, whether it is legally binding, when it can be set aside, how long it lasts, what it may cost and how the Family Law legislation applies to married couples as well as de facto couples in New South Wales and across Australia.
What is a prenup, or Binding Financial Agreement (“BFA”)?
A prenup is a private agreement between a couple about their financial relationship. It can set out what will happen to some or all of their property, financial resources and spousal maintenance if their marriage or de facto relationship breaks down.
“Prenup” is the popular name. The Family Law Act 1975 (Cth) calls it a Financial Agreement. Part VIIIA of the Family Law Act applies to married couples, while Part VIIIAB applies to most de facto couples.
Unlike Consent Orders, a BFA is not filed with or approved by a Court before it takes effect. If it is binding and covers the relevant financial issues, it can exclude the Court’s usual power to decide those issues. The Federal Circuit and Family Court of Australia (“the Court”) describes this as a way of “ousting” the jurisdiction of the Court to make orders about property, maintenance or both.
A BFA does not have to deal with everything relating to your property settlement. It may cover the whole financial relationship or only a particular issue, such as a business, inheritance or spousal maintenance.
When can you make a BFA?
A BFA can be entered into before, during or after a relationship.
For married couples, the relevant provisions of the Family Law Act are:
- Before marriage: Section 90B — the classic “prenup”.
- During marriage: Section 90C — often called a “postnup” or postnuptial agreement. A section 90C agreement can also be made after separation but before divorce.
- After a divorce order is made: Section 90D.
For de facto couples, the relevant provisions are:
- Before starting a de facto relationship: Section 90UB – the classic “prenup” but for de facto couples.
- During a de facto relationship: Section 90UC.
- After the relationship breaks down: Section 90UD.
There is no legal advantage in entering a BFA at a particular time. For example, leaving a prenup until just before the wedding can actually operate at a disadvantage. BFA’s are complex legal documents, and starting early gives each of you time to exchange financial information, obtain valuations if needed, consider the proposed terms, receive meaningful legal advice and negotiate without the pressure of an approaching wedding date.
What can a BFA cover?
A BFA can be tailored to your circumstances. At minimum, a BFA must cover how property or a financial resource is dealt with if your relationship ends and/or financial support (called ‘maintenance’) during a relationship or after a relationship ends. Depending on its purpose and drafting, it may address things like:
- Property (including assets/financial resources/liabilities) you each own when the relationship starts;
- How jointly owned property will be divided;
- Assets acquired later, including investment properties and inheritances received during the relationship;
- How increases in the value of separate property will be treated;
- Savings, shares, managed funds and cryptocurrency;
- Companies, trusts, partnerships and business interests;
- Personal, joint and business debts;
- Gifts or loans from parents and other family members;
- Superannuation, provided the additional superannuation-splitting requirements are met;
- Whether one partner will pay spousal or de facto maintenance, or whether maintenance will be limited or waived; and
- What will happen to a family pet.
A BFA can also use different outcomes for different stages of the relationship. For example, it might provide one outcome if the relationship ends within five years and another after the birth of a child or a longer relationship. These provisions need careful drafting so that the outcome is clear and workable.
Companion Animals
Since 10 June 2025, the Family Law Act has included a specific framework for what happens to family pets (referred to as “companion animals”) after a relationship breaks down. If separated parties cannot agree, the Family Law Act allows the Court to order that one person own the animal, that ownership be transferred to a consenting third person, or that the animal be sold. The Court cannot make a shared-care order for a family pet.
A BFA can record who is intended to keep a companion animal. Any proposed shared-care arrangement needs particularly careful advice, because the Court’s property powers do not extend to making a shared-care order if a dispute later arises.
What a BFA cannot cover
A BFA is a financial document. It cannot “oust” the jurisdiction and power of the Court over parenting matters including parental responsibility, or how much time a child will spend with each parent. If the Court is asked to make parenting orders, the child’s best interests remain the paramount consideration. Parents cannot use a ‘prenup’ to contract out of their children’s needs or the Court’s parenting jurisdiction.
It is also not a substitute for a Binding Child Support Agreement under the child support legislation. Although a BFA may be combined with a Binding Child Support Agreement document if the statutory requirements are met, the independent legal advice requirements for a Binding Child Support Agreement are different from those for a BFA and therefore require separate and specialist consideration.
A BFA also cannot be used to:
- Defeat or defraud creditors;
- Bind a third party who has not joined the agreement or is not otherwise legally bound;
- Avoid tax laws or guarantee a particular tax outcome;
- Prevent the Court from setting the agreement aside on a statutory, contractual or equitable ground; or
- Completely exclude the Court’s maintenance power where certain statutory requirements apply (sections 90F or 90UI).
Tax and transfer duty implications
Formalising a property settlement can have practical tax benefits, but a BFA does not automatically “save tax”.
The Australian Taxation Office explains that a relationship-breakdown CGT rollover may apply when an asset is transferred because of a relationship breakdown under a qualifying BFA or Court Order. The rollover generally defers the capital gain; it does not erase it. The recipient will usually inherit relevant aspects of the transferor’s tax history and cost base.
In NSW, a transfer of relationship property may also qualify for a transfer-duty exemption under section 68 of the Duties Act 1997 (NSW) if the statutory conditions are met.
Revenue NSW’s guidance includes transfers made under a BFA following the breakdown of a marriage or de facto relationship.
Tax and duty consequences depend on the asset, the timing and the terms of the transaction. You should obtain specialised tax advice before signing or implementing a BFA, particularly where there is real property, a company, a trust, a business, overseas assets or an anticipated capital gain.
Are prenups legally binding in Australia?
Yes — a properly made BFA can be legally binding and enforceable in Australia. However, a BFA must meet specific requirements in order to be binding and enforceable.
In order to satisfy the requirements of a BFA under Pt VIIIA (applying to married couples) or VIIIAB (applying to de facto couples) of the Family Law Act, the BFA must have the following:
- It must be in writing;
- It must specify what section of the Family Law Act that it is expressed to be made under;
- It must be between parties:
- “who are contemplating entering into a marriage with each other” and one or more other people (s 90B)
- “to a marriage” and one or more other people (s 90C)
- “to the former marriage” and one or more other people (s 90D)
- “who are contemplating entering into a de facto relationship with each other” (s 90UB)
- who are “in a de facto relationship” (s 90UC)
- to a de facto relationship which has broken down (s 90UD).
- It must be between parties who, before the agreement is signed, have been given independent legal advice provided to them by an Australian legal practitioner about:
- the effect of the agreement on their rights; and
- the advantages and disadvantages, at that time, of entering the agreement;
- It must be signed by all parties;
- Each party receives a signed statement from their lawyer confirming that the required advice was given;
- A copy of each lawyer’s statement is given to the other party, or their lawyer; and,
- The agreement cannot have been terminated or set aside by a Court.
For BFA’s made before a relationship (in other words, prenups) or during a relationship that deal with property or financial resources, and the parties are not divorced, or if the parties are splitting superannuation in the financial agreement, a written separation declaration is also required.
It is therefore that a BFA is reviewed by a family lawyer when the relationship ends, before either person starts transferring assets or relying on the terms of the agreement.
De Facto relationships
As outlined above, de facto couples can use BFA’s in much the same way as married couples. The Family Law Act applies irrespective of whether you are in a heterosexual or same-sex relationship.
However, there are a few requirements that uniquely apply to de facto couples entering into a BFA pursuant to sections VIIIAB, 90UC or 90UD:
- The BFA must be between parties who are, or were, in a de facto relationship as defined by the Family Law Act;
- Geographical requirements, i.e., one or both parties must not be ordinarily resident overseas or in Western Australia. Western Australia has its own scheme for financial agreements between de facto couples under ss 205ZN to 205ZP of the Family Court Act 1997 (WA) (however, they have also been able to enter into agreements under the Family Law Act regarding superannuation since 28 September 2022).
A de facto relationship under the Family Law Act is required for the BFA to be effective, and it will only become effective once the de facto relationship has broken down.
A de facto relationship is defined in section 4AA(1) of the Family Law Act as:
“A person is in a de facto relationship with another person if:
- the persons are not legally married to each other; and
- the persons are not related by family; and
- having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.”
It is important to remember that a BFA applying specifically to a de facto relationship terminates on the parties marrying.
If you are in a de facto relationship, thinking of getting a BFA, and intending on potentially marrying your partner in the future, you may wish to consider seeking legal advice about entering into two separate BFA’s, or a combined BFA as de facto parties and as a couple contemplating marriage.
If you are not sure whether you are considered to be in a de facto relationship, you should get some legal advice.
The importance of independent legal advice
The requirement for each party entering into a BFA to receive legal advice is a strict one. Independent advice must be real and tailored to the person receiving it. It is not enough for a lawyer simply to witness a signature, read the agreement aloud or provide a generic description of the Family Law Act.
The Federal Circuit and Family Court of Australia decision in Shala & Shala [2025] FedCFamC1F 639 highlighted the importance of receiving legal advice that explains the following:
- Your financial rights under the Family Law Act;
- The nature of the property adjustment orders you could likely achieve by pursuing a claim under Part VIII of the Family Law Act;
- The advantages and disadvantages of entering into the BFA, compared to what you may otherwise be entitled to by bringing a financial cause under Part VIII of the Family Law Act.
Inadequate legal advice may be a factor in a BFA being set aside in the future.
Exchanging financial documents
In financial or property proceedings — and between separated parties preparing to start them — the Family Law Act imposes a duty to give full and frank disclosure of all information and documents relevant to the financial issues. The Court’s Duty of Disclosure brochure explains what that duty involves and the possible consequences of non-compliance.
However, the Family Law Act does not set out an express duty of disclosure specifically for negotiating or making a BFA. The duty in relation to entering into BFAs is almost a negative one — if a party does not disclose their financial circumstances to the other, a BFA is at greater risk of being set aside.
Good practice is for both parties to exchange comprehensive and accurate information about their financial circumstances, including schedules of assets, liabilities and financial resources, obtain reliable values where necessary, and update the information if circumstances change before signing. Comprehensive and current disclosure is also important so each lawyer can give meaningful legal advice, and each party can make an informed decision about entering into a BFA.
When can a BFA be set aside?
Sections 90K (applying to married couples) and 90UM (applying to de facto couples) of the Family Law Act allow a Court to set aside a BFA, or termination agreement, in defined circumstances. The main grounds include:
- Fraud, including non-disclosure of a material matter such as a hidden asset or a materially false statement about value.
- Creditor avoidance, including a BFA made to defeat creditors or with reckless disregard for their interests.
- The BFA is void, voidable or unenforceable, which can include contractual or equitable issues such as mistake, uncertainty, duress or undue influence.
- Impracticability, where later circumstances make it impracticable to carry out the whole agreement or a relevant part of it. Inconvenience or a disappointing outcome will not necessarily be enough.
- A material change concerning a child, where the change relates to the child’s care, welfare and development, and the child or a person caring for the child would suffer hardship if the BFA remains in place.
- Unconscionable conduct, where one partner was under a special disadvantage, and the other knowingly exploited that disadvantage.
- Certain superannuation problems, including an agreement covering an unsplittable interest.
Pressure, vulnerability and last-minute signing
A leading Australian case involving a ‘prenup’, Thorne v Kennedy [2017] HCA 49, involved a much wealthier fiancé presenting a BFA to the other party shortly before the wedding and made clear that the wedding would not proceed unless it was signed. The other party had moved to Australia for the relationship, had no substantial assets or local support network, depended on their wealthier partner and was advised that the BFA was heavily against her interests. The High Court restored the orders setting the BFA aside due to undue influence and unconscionable conduct.
This does not mean every one-sided or late BFA will fail. It shows that timing, dependence, emotional pressure, financial inequality, access to support, the opportunity to negotiate and the quality of independent legal advice all matter.
Is an ‘unfair’ BFA automatically invalid?
No. A BFA does not need to produce the result a Court would consider “just and equitable” in an ordinary property case. The purpose of a BFA is to let the couple choose a different outcome and obtain certainty.
A poor bargain or later regret is not, by itself, a ground to set a BFA aside. However, a very one-sided outcome may be important evidence when considered with pressure, vulnerability, non-disclosure, inadequate advice or unconscionable conduct.
There is no standard expiry date for a BFA. Subject to its terms, a BFA generally remains in effect until:
- It is terminated by a formal written termination agreement;
- A new BFA validly terminates and replaces it;
- A Court sets it aside; or
- Another statutory event affects it.
Ending a BFA is not as simple as tearing it up or agreeing verbally that it no longer applies. The Family Law Act requires a formal process, including independent legal advice for both partners.
However, one important exception concerns de facto couples. As outlined above, de facto BFA’s cease to be binding if the couple later marries each other. If you have a de facto agreement and are planning to marry, obtain legal advice well before the wedding about replacing it.
Even where a BFA has no expiry date, it is sensible to review a BFA after major life events, such as:
- The birth or adoption of a child;
- One partner leaving paid work or taking on most caring responsibilities;
- Buying or selling significant property;
- Starting, selling or restructuring a business;
- Receiving a substantial inheritance or gift;
- Taking on significant debt;
- Moving overseas or acquiring overseas assets;
- Changing from a de facto relationship to marriage; or
- A significant change in family law.
A review does not automatically change the agreement. Any amendment, replacement or termination must follow the correct legal process.
Is a prenup right for you? Talk to Watts McCray
A prenup can provide clarity and protect the financial arrangements you and your partner have chosen — but only if it is carefully drafted and entered into through a sound, independent process.
Watts McCray’s experienced family lawyers can advise you about whether a financial agreement is appropriate, identify the issues that need to be covered and prepare an agreement tailored to your assets, family circumstances and future plans. Contact our team today to discuss your options!
Frequently asked questions
Are prenups legally binding in Australia?
Yes. The legal term is Financial Agreement. A Financial Agreement can be entered into before, during or after a relationship and can be binding if it meets the requirements of the Family Law Act, including signatures, independent legal advice for each partner, lawyers’ statements confirming the advice and the required exchange of those statements.
Can a prenup be overturned?
Yes, but not simply because one person later regrets the deal. Grounds include fraud or material non-disclosure of financial circumstances, creditor avoidance, duress, undue influence, unconscionable conduct, impracticability, certain child-related hardship and some superannuation problems.
Do you need a lawyer for a prenup?
Yes. Each partner must receive independent legal advice from their own Australian lawyer before signing, if the agreement is to satisfy the ordinary binding requirements. One lawyer cannot advise both partners.
Can de facto couples get a prenup?
Yes. De facto couples can make a Financial Agreement before, during or after their relationship under Part VIIIAB of the Family Law Act as long as they geographically reside in a participating jurisdiction (i.e., they do not ordinarily reside overseas or in Western Australia). If the couple later marries, that de facto agreement ceases to be binding, so fresh advice is required.
Do prenup rules differ in NSW or between states?
For married couples, the Financial Agreement framework comes from the federal Family Law Act, so the core rules are the same in NSW and throughout Australia.
For de facto couples, Part VIIIAB applies in the referring states and the territories, including NSW, Victoria and Queensland. Western Australia is the main exception: de facto property matters are generally dealt with under Western Australian legislation in the Family Court of Western Australia, although federal provisions apply to some de facto superannuation issues. If either partner lives in WA or has a strong connection with WA, specific advice is essential.
State and Territory laws can still affect related issues, including:
- registration of a de facto relationship;
- transfer duty and land-title procedures;
- succession and family-provision claims after death; and
- the legal effect of other domestic relationship agreements.
How long does a prenup last?
There is no automatic expiry date. It usually continues according to its terms until formally terminated, replaced or set aside. Major life changes should prompt a review, and a de facto Financial Agreement needs attention before marriage.
How much does a prenup cost?
There is no prescribed fee, and prices can vary significantly. The cost depends on whether the BFA you are proposing to enter into is straightforward, how much negotiation is required and whether it involves businesses, trusts, complex superannuation, overseas property, tax advice or valuations, or consideration of potential significant changes in future circumstances, such as having/adopting children.
Both partners need different lawyers, so there will be two sets of legal fees. Costs can increase if negotiations are prolonged, financial information is incomplete, or the agreement needs tax, corporate, succession or cross-border advice.
A carefully prepared BFA can still be a modest investment compared with the cost and uncertainty of contested property litigation. The right comparison is not simply the cheapest available document; it is the cost of obtaining an agreement that accurately reflects your circumstances and is much more likely to withstand a future challenge.
