Prenups in Australia: how binding financial agreements actually work
Australians tend to hear "prenup" and picture Hollywood. But the Australian version — the binding financial agreement, or BFA — is quieter, more practical, and available to far more people than the wealthy: second marriages, blended families, family businesses, an inheritance on the horizon. Here is how they really work, and the one mistake that undoes them.
Michael NahoumPrincipal Solicitor · 3 August 2026 · 6 min read
Photo: sourced from Pexels and used under the Pexels licence.
Nobody plans a relationship around its ending — and that is precisely the argument for settling the money question while you still like each other.
A binding financial agreement, or BFA, lets a couple decide privately, in advance, how property and finances would be dealt with if the relationship ever ended. Done properly, it can be binding without upfront court approval. Done badly, it is expensive paper.
What a BFA is — and when you can make one
Under the Family Law Act 1975, couples can make a financial agreement before marriage, during marriage, after divorce, before or during a de facto relationship, or after a de facto relationship has broken down. De facto couples, including same-sex couples, have their own equivalent provisions.
The agreement is a contract between the two of you. No judge reviews it when it is made, and no court approves it in advance. That is the point: it trades the Court's discretion for certainty you have designed yourselves.
An agreement can deal with how property and financial resources would be divided — including superannuation, if the technical splitting requirements are met — and with spousal maintenance. Maintenance provisions need careful drafting because the Act places limits on how they operate.
What a BFA cannot do is decide parenting arrangements. Child support also sits largely outside the BFA framework: it is dealt with under separate child support legislation, and a financial agreement cannot simply contract out of a child's proper support.
The strict rules that make it binding
Because there is no court checking fairness before the agreement is made, Parliament put the safeguards into the signing process itself.
To be binding, the agreement must be in writing and signed by both parties. Critically, each of you must first receive independent legal advice from your own lawyer about:
the effect of the agreement on your rights; and
the advantages and disadvantages, at the time the advice is provided, of entering into the agreement.
Each lawyer provides a certificate or statement confirming that the required independent legal advice has been given. One lawyer cannot act for both of you, and the advice cannot be a mere formality. It is the safeguard that holds the whole structure up.
What makes a financial agreement durable
Meaningful, current financial disclosure — hidden assets or incomplete disclosure are among the surest ways to create a later challenge.
Genuinely independent advice — a real adviser for each party, with time to advise properly.
No pressure, no artificial deadline — months before the wedding, not days.
Workable terms — drafted for the life you will actually live: future assets, children, a business that grows, or a home that changes hands.
Review at life's turning points — marriage, children, inheritance, a major asset purchase or a business event. Agreements can be updated, replaced or terminated if the parties follow the proper process.
The timing lesson: Thorne v Kennedy
The most important prenup case in Australia is a cautionary tale.
In Thorne v Kennedy, a wealthy property developer presented his fiancée — newly arrived in Australia, with no assets of her own — with an agreement shortly before their wedding, with guests already invited, on terms her own lawyer described as inappropriate. She signed anyway.
The High Court set the agreements aside for undue influence and unconscionable conduct.
The lesson is not that prenups do not work. It is that pressure, inequality and lack of time can be fatal to them. An agreement raised early, negotiated fairly, disclosed honestly and signed with time to think is a very different document from one produced on the eve of a wedding.
If you want an agreement to hold, the safest thing you can do is start the conversation months ahead.
Who actually benefits
The stereotype is the very rich. The reality in the Hills District is more ordinary and more varied:
people entering a second relationship who want their children's inheritance protected;
couples where one partner owns a business or is mid-way through a build or development;
families expecting an inheritance they want kept separate;
partners entering a relationship with a significant asset gap; and
separating couples who want a private, final resolution without court involvement.
For all of them, the appeal is the same: certainty, decided together, at a fraction of the cost of arguing about it later.
Can it be challenged?
Yes — on limited grounds.
A Court may set aside an agreement on grounds including fraud or material non-disclosure, duress, undue influence or unconscionable conduct, impracticability, or a material change in circumstances relating to the care, welfare and development of a child where hardship would result.
An agreement may also be vulnerable if the statutory requirements for it to be binding have not been met, including genuinely independent legal advice for each party.
Every one of those grounds is, in truth, a drafting-and-process checklist: disclose properly, deal fairly, advise independently, avoid pressure, and draft for real life. That is the standard the agreement has to be built to.
How Michael Campbell Law can help
Michael drafts binding financial agreements for clients across the Hills District and Sydney. He also provides independent advice and the certificate or statement the law requires where a client has been given an agreement to sign.
Michael can act for one party to the agreement. The other party must have their own independent lawyer.
It starts with a free 15-minute phone call and an honest view of whether an agreement fits your situation.
This article is general information only and is not legal advice. It describes the law as at August 2026 in general terms. Whether a financial agreement is right for you, and what it should say, depends entirely on your circumstances. For advice about your situation, contact Michael Campbell Law or another qualified solicitor.
Good to know
Frequently asked questions
Is a prenup legally binding in Australia?
Yes, when it is done properly.
Australian law provides for financial agreements under the Family Law Act 1975 — available before marriage, during marriage, after divorce, before or during a de facto relationship, or after a de facto relationship has broken down.
The agreement must be in writing, signed by both parties, and each party must first receive independent legal advice from their own lawyer. That advice must be confirmed by a certificate or statement from each lawyer.
Miss a requirement and the agreement may not bind at all.
What can a prenup cover — and what can it not?
A binding financial agreement can deal with how property and financial resources would be divided if the relationship ends, including superannuation if the technical splitting requirements are met.
It can also deal with spousal maintenance, although those provisions need careful drafting.
It cannot decide parenting arrangements. Child support is dealt with under separate child support legislation, and a BFA cannot simply contract out of a child's proper support.
Agreements also work best when they say what happens to assets acquired later, not just what each person owns today.
When should a prenup be signed?
Months before the wedding — not weeks or days.
The High Court set aside the agreements in Thorne v Kennedy where a fiancée was presented with terms shortly before the ceremony, with guests already invited.
Pressure and lack of time are precisely the kinds of factors that can cause agreements to fail. Raise it early, negotiate it fairly, and let both lawyers do their work without a wedding date bearing down on the process.
Can a prenup be challenged later?
Yes, on limited grounds — including fraud or material non-disclosure, duress, undue influence or unconscionable conduct, impracticability, or a material change in circumstances relating to the care, welfare and development of a child where hardship would result.
An agreement may also be vulnerable if the statutory requirements for it to be binding have not been met.
This is why quality matters: proper disclosure, fair dealing, genuinely independent advice, enough time, and sensible drafting are what make an agreement durable rather than decorative.
