Pre-nuptial agreements

Since December 2000, the Family Law Act 1975 has permitted Australian couples to enact binding financial agreements in case of marriage breakdown. Financial arrangements drafted prior to marriage are sometimes known as "prenuptial agreements", however it is possible to create a financial agreement anytime during a marriage, and even after a couple divorces. Since 2002, defacto couples have also had the option to create similar financial agreements.

Financial agreements aim to encourage couples to agree about how their matrimonial property and financial resources should be distributed in the event of separation or divorce (depending upon the specific terms of the agreement). By identifying pre-matrimonial assets, couples have greater control and choice over their own affairs in the event of marital breakdown.

Financial agreements mainly protect ownership of assets brought into a marriage/relationship (eg from a first marriage to a second marriage), ownership of special assets acquired during a relationship (such as an inheritance), and to prevent costly litigation if the relationship does breakdown. These agreements also cover the issues of maintenance payments in the event of separation or divorce.

In order for a Financial Agreement to be binding under the Family Law Act, the agreement must meet certain criteria set out in the legislation. For example, the agreement must be in writing and signed by both parties. Prior to the agreement, both parties must also have obtained independent legal advice, and a certificate signed by the person providing the independent legal advice must be annexed to the agreement.

Legislation also states that a financial agreement will continue to operate despite the death of a party to the agreement, and operates in favour of and is binding on the personal representatives of that party. An agreement can only be terminated (during its operation) by the parties entering into another written agreement known as a Termination Agreement, or if a Court makes an Order setting aside a financial agreement by reason of fraud (including non-disclosure of a material matter); unconscionability, impracticality, or a material change in circumstance leading to hardship.