A binding financial agreement, sometimes known as a prenuptial agreement, sets out the way some or all of a couple’s assets will be divided in the event that their relationship breaks down. It can also deal with spousal maintenance.

The Family Law Act 1975 (Cth) allows married couples and de facto couples to enter into financial agreements which are legally binding. Although a binding financial agreement can be signed at any point during a relationship, it is preferable that the agreement is put in place before getting married or entering into a de facto relationship (i.e. living together).

Whether you are thinking about getting married or remaining in a de facto relationship for the foreseeable future, establishing the agreement while you are happy in your relationship is far more likely to result in a prenuptial or de facto financial agreement that is fair to both of you, and will ultimately save you time and money.

Protecting your wealth in relationships

You’ve worked hard for your money and it’s important that, as you enter a serious relationship, you take steps to protect your assets.

It is important to consider a binding financial agreement when:

• you have more money, property or assets than your partner at the beginning of your relationship
• you may, at a later stage, be entitled to an inheritance or large gift
• you operate a family business or investment that you need to preserve
• you want to ensure the terms of any property division are agreed up front to avoid going to court later
• you are forming a new relationship and you have children who need to be protected financially.

In the following video series, CGW family law partner Justine Woods discusses what you need to know about binding financial agreements for married and de facto couples, including the advantages and disadvantages, the potential risks and loopholes, and what the process is likely to involve.