Prenuptial Agreements in Australia

Prenuptial Agreements in Australia

In this video, Page Provan Managing Director and Accredited Family Law Specialist, Bruce Provan discusses what are prenuptial agreements, are they effective and is there an alternative?



Hello, I’m Bruce Provan, I’m the Managing Director of Page Provan Family and Fertility Lawyers. We’re a firm of lawyers that practice in Brisbane exclusively in Family and Fertility law. I want to talk to you today about prenuptial agreements, are they effective and is there an alternative?

Now, a prenuptial agreement is a binding financial agreement that parties enter before they get married and the agreement states that in the event of a separation, this is to occur, and this is how our assets, liabilities, and superannuation are to be distributed.

There’s simply one category of binding financial agreements. There can also be agreements in relation to de facto couples. So a de facto couple can enter into a similar agreement, again, to provide that in the event of separation, that this is how our property is to be distributed.

There can also be post-nuptial agreements, and that is, similarly, an agreement reached between a couple to say, in the event we separate, this is how everything is to be distributed.

So sometimes, lawyers will advise their clients against entering into prenuptial agreements, especially if the wedding is impending, and one person may feel pressured into entering into one of these agreements in the days or weeks leading up to the wedding.

A lawyer is likely to advise that so that one person doesn’t feel pressured into signing the agreement, that the agreement wait until just after the wedding. Now, the question is, are prenuptial agreements effective?

The short answer is yes, provided they’re properly drafted. Now, since about 2000, Family Law Act has been changed to allow for binding financial agreements to be prepared and to have legal effect, provided they’re properly drafted and provided that both sides receive independent legal advice before they sign.

There have been a number of cases where these prenuptial agreements or binding financial agreements have been set aside for technical problems. There was a spate of these cases for about 10 years after the act was changed to make them lawful and the result of that was that the act was amended.

So that the court is able to overlook these technical difficulties if there’s an application to enforce one of these agreements. But even despite that, since then, there have been agreements, sorry, there have been cases where these agreements have been set aside.

But it doesn’t occur all of that often, provided you have an agreement that’s been properly drafted by a lawyer that meets the technical requirements, and both sides have had independent legal advice before signing, then generally, the agreement will be effective.

Now, one of the difficulties with these prenuptial agreements is the obvious problem that if one person decides that they want to have an agreement to say how their assets are to be divided in the event of separation, they may feel uncomfortable discussing that with their new partner and possibly their husband or wife to be.

And in fact, in some cases, simply having the discussion can sour the relationship and I know of cases where the issue has been raised between a couple, and that’s led to the end of the relationship.

So if you are wanting to enter into one of these binding financial agreements, certainly seek advice from a lawyer at an early stage, because the whole process can be quite time consuming and take several months for the agreement to be drafted and the differences to be negotiated before the agreement can be signed.

If a person proposes to their partner that they enter into a binding financial agreement, but the answer is, no, I don’t want to do so, or what sometimes happens, they get advice from a lawyer not to enter into the agreement, then there is an alternative that could apply in a very limited number of cases.

In a case of Chancellor and McCoy about 10 years ago, there was circumstances where there had been a long-term relationship between a gay couple who did not have children. And the way they conducted their affairs was not to intermingle their assets. All of their assets were owned in their own name.

They did have arrangements for the sharing of joint expenses during the relationship. They each had wills that left their property to people other than each other and in that case, the judge said that in the circumstances of the case, it was not just inequitable for an order to be made.

One of the parties then appealed to the the full court of the family court, and the full court said that the judge, in the first instance, got it right. So what we’re sometimes seeing is couples who don’t intend to have children, they enter a relationship with their own property and keep those assets separate, but enter into an arrangement with the sharing of expenses.

In that case, it may be a case where a court decides it’s not just an equitable for an order to be made. Look, that only applies in a limited number of circumstances. If you have any questions or concerns, it’s important that you obtain advice from a lawyer at an early stage.

My name is Bruce Provan from Page Provan, Family and Fertility Lawyers.

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