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The Top 5 things to know about Pre-nuptial Agreements – before you ask your fiancé for one

Published on July 8, 2025 by Paul Lewis

Pre-nuptial agreements were not legally recognised in Australia until 2000 when the Family Law Act, 1975 was amended to introduce Financial Agreements before marriage (“pre-nups”), and financial agreements during marriage and after divorce.

As a family law specialist with 35 years experience in family and relationships law, my top 5 things that you need to know about financial agreements before you raise the idea of having one with your spouse partner are:

1. Identify why you want one and what it is that you are trying to achieve
2. Understand that a Financial Agreement is a voluntary contract
3. Act early and don’t leave it until the last minute
4. Be aware of “the hardship exception” and the need for balance
5. Know the role of the lawyers, their limitations and the requirement that each party receive independent legal advice

Here are my observations on each of the above:

1. Identify why you want one and what it is that you are trying to achieve

A common reason for wanting a financial agreement is where there is a disparity of wealth between the parties and the wealthier party seeks a level of protection and “certainty of outcome” if the marriage (or de facto relationship) does not work out.

Yet that is not always the reason. I once acted for a client who was getting married and he and his fiancé had both been previously married. When I asked why they wanted a prenup it turned out that both had adult children from their previous marriages, and it was the children who wanted them to have a financial agreement. The couple themselves did not feel that they needed a prenup.

The above example falls into the category of family expectation being a driver for having a financial agreement. This can be reasonable where one spouse, or both parties, may receive a large inheritance in the future. Similar drivers can be the protection of a family farm or other businesses where there is a logical focus on succession planning for the business, sometimes involving two or more adult siblings.

2. Understand that a Financial Agreement is a voluntary contract

Financial Agreements under the Family Law Act are not mandatory. Instead, couples can opt in to a financial agreement before (or during) marriage, or before (or during) a de facto relationship. In opting in to a financial agreement the couple is “opting out” of the usual provisions (call them the “default” provisions if you prefer) under the Act in relation to the alteration of property interests between the parties, or spousal maintenance, or both, if they separate. In short, the opting in and opting out involves a negotiation, specifically, the negotiation of a tailor-made agreement between the parties.

A financial agreement can be set aside by the Court if there was duress by one party against the other at the time that the agreement was entered into, or if it would be unconscionable to allow the agreement to stay in place. Sticking to a clear process in the negotiation of what is a voluntary contract guards against claims of duress or unconscionability.

3. Act early and don’t leave it until the last minute

Prenups and other financial agreements are technical documents and must be tailored to your specific circumstances. ‘Do it yourself’ options carry risk and I have not seen one that is compliant. The legal issues involved and the need to ensure that any agreement is properly drafted, means that you should seek early advice from a family law specialist.

There are many reasons for this:

• Each client’s financial circumstances are different and their reasons for wanting a financial agreement will be unique.
• The architecture of the legislative provisions allows a high degree of flexibility in relation to the content of financial agreements. So there is time involved in advising the client of their options after identifying their needs and interests.
• There is a high level of professional responsibility and risk carried by the respective lawyers advising each party. Each lawyer must be satisfied that their client understands the terms of the proposed agreement and that their decision to accept the agreement is voluntary, and not brought about by any promise, threat or burden. Each lawyer must advise their client of the advantages and disadvantages of the proposed agreement before they sign it. That advice is not shared between the lawyers, it remains confidential between each party and their lawyer.

If you are thinking of entering into a pre-nuptial or other financial agreement, it is also important that you consider the budget you will set aside for the process, when you obtain early legal advice to identify and discuss your options.

4. Be aware of “the hardship exception” and the need for balance

Perhaps the most common question that is asked about pre-nuptial agreements by a prospective client, is “are they water-tight, do they work?”

There is a long list of circumstances in which a Court may set aside a financial agreement (see section 90K) and they include things like:

• fraud
• non-disclosure of a material matter, and
• if the Court is satisfied that “since the making of the agreement, a material change in circumstances has occurred (being circumstances relating to the care, welfare and development of a child of the marriage) and, as a result of the change, the child or, if the applicant has caring responsibility for the child (as defined in subsection (2)), a party to the agreement will suffer hardship if the court does not set the agreement aside.” [Section 90K (1)(d)]

The latter is often known as the “hardship exception”. In short it is there to protect a party or their child if the party has the child living with them, and to ensure that they do not experience hardship because of a financial agreement.

I encourage clients to aim for balance in the financial agreement, whether in relation to how the property of the parties or a specific asset of a party is dealt with, or in relation to whether the agreement deals with spousal maintenance or not, and if so, in what way. Achieving balance in the financial agreement is the best vaccine against the unpredictable events that can happen in life that might trigger a case for a financial agreement to be set aside under the hardship exception.

5. Know the role of the lawyers, their limitations and the requirement that each party receive independent legal advice

It is not the role of the lawyer to tell a client whether they should or should not have a financial agreement, in the same way that a lawyer cannot tell a client whether they should get married or should separate from their spouse. These are personal decisions for the client to make.

Remembering that a pre-nuptial agreement is voluntary and is a contract to be negotiated (which may or may not result in a concluded agreement documented as the signed financial agreement), the lawyer’s role is to inform and advise on the options that are open to the client when considering the possibility of a financial agreement.

If a couple wish to make a pre-nuptial agreement, a common method that I favour is a series of 4-way meetings between the parties and their lawyers to map out the terms of a mutually acceptable financial agreement. Parties might also be encouraged to have 2 or 3 sessions of counselling to be clear about their joint and separate goals for the future before they place attention on the details and boundaries of a financial agreement.

It is a mandatory requirement that each party to a financial agreement should receive independent legal advice before they enter into a financial agreement. Each legal practitioner signs a certificate stating that they have provided advice in the prescribed terms to their client before the client signed the agreement. The lawyers cannot be from the same law firm (another common question that is asked.) The Act does not oblige each party’s lawyer to be on board from the start of the discussions and negotiations about a pre-nuptial agreement, however that may be “best practice” in many cases.

This article is not intended to cover all of the traps associated with proposing a financial agreement before or during a relationship (marriage or de facto), nor does it set out all of the tips that I cover with clients when they contemplate such an agreement. Rather, the purpose of the article is to point to 5 things for people to consider before they see their lawyer for the first time, and before they have that first conversation with their fiancé.

Please note that this article does not constitute legal advice. If you are seeking professional advice on family law matters, you can contact Carroll & O’Dea Lawyers on 1800 059 278 or via our Contact Page and one of our lawyers will be able to assist you.