Updated 3 November 2026
CM Law’s Ultimate 50 Things You Need to Know About Property Settlement During Divorce #19: What if there is a prenuptial agreement?
What happens if there is a prenuptial agreement when you separate?
A binding prenuptial agreement can determine how covered property and maintenance issues are resolved after separation in NSW. Its effect depends on its terms, statutory requirements and whether grounds exist to challenge it. Give your lawyer the complete signed agreement before negotiating a settlement or transferring assets.
Australian law generally calls these documents financial agreements. The Family Law Act 1975 governs them; ordinary family-law disputes in NSW generally proceed in the Federal Circuit and Family Court of Australia. A document’s title alone does not establish that it is binding.
What can a financial agreement cover?
A financial agreement can address specified assets, financial resources and spousal or de facto maintenance. It may cover the whole financial relationship or selected matters, such as an existing business or anticipated inheritance. Property outside its scope may still require negotiation or determination under ordinary family-law principles.
Drafting should explain how debts, increases in value, sale proceeds and replacement assets are treated. Superannuation provisions require particular care. An agreement between partners does not automatically release either person from obligations to their bank.
What makes a prenup binding in NSW?
A prenup must satisfy the applicable financial-agreement requirements, including writing, signatures and independent legal advice before signing. Each spouse must receive advice about its effect on their rights and the advantages and disadvantages of making it. The lawyers’ signed advice statements must also be provided and exchanged as required.
- The agreement must identify the correct statutory basis and deal with permitted matters.
- Advice must precede signing, although the lawyer’s signed statement may be supplied before or afterwards.
- The agreement must not have been terminated or set aside; earlier agreements need checking.
Does a lawyer’s certificate guarantee enforceability?
A signed advice statement does not guarantee that an agreement will withstand challenge. The actual advice, execution process and surrounding circumstances remain important. Courts have limited powers to uphold agreements despite certain advice or statement defects, but those powers are conditional and should never replace proper preparation before signing.
Each partner needs their own independent advice. An online template, AI-generated draft or witnessed signature does not replace that advice. Ask your lawyer to explain the practical outcome under different separation scenarios, including a long relationship and substantial caring responsibilities.
Can a prenup be challenged simply because it is unfair?
An unequal or disappointing outcome does not, by itself, allow a court to cancel a financial agreement. Unlike consent property orders, financial agreements are not approved in advance through a general just-and-equitable assessment. A challenge must identify a recognised legal basis, supported by evidence about the agreement or relevant circumstances.
The June 2025 property reforms did not introduce a general fairness review of prenups. Financial imbalance may nevertheless matter when assessing pressure, vulnerability or unconscionable conduct in the circumstances of a particular agreement.
When can a court set aside a financial agreement?
The statutory grounds include fraud involving material non-disclosure, certain conduct affecting creditors, an agreement being void or unenforceable, subsequent impracticability and unconscionable conduct. A specific ground also concerns material changes involving children that cause hardship. Whether any ground applies requires careful analysis; suspicion or dissatisfaction alone is insufficient.
- Duress and undue influence can affect validity under the applicable legal principles.
- Some grounds concern interference with another partner’s interests or particular superannuation restrictions.
- A change in wealth or employment does not automatically establish impracticability or another ground.
What did Thorne v Kennedy establish about signing under pressure?
In Thorne v Kennedy [2017] HCA 49, the High Court restored orders setting aside a prenuptial agreement and a substantially identical postnuptial agreement. All seven judges relied on unconscionable conduct; a five-judge majority also found undue influence. Independent legal advice did not overcome the circumstances in which the agreements were signed.
Ms Thorne had moved to Australia to marry Mr Kennedy and depended on him financially and personally. Shortly before their wedding, he told her it would not proceed unless she signed. Despite strong advice against signing from her independent solicitor, she signed four days before the wedding and later signed the replacement agreement.
Her dependence, limited alternatives and the pressure surrounding the wedding mattered. The decision illustrates the importance of genuine choice, adequate time and meaningful negotiation. It does not establish that unequal wealth alone invalidates a prenup. The High Court did not determine her final property settlement or maintenance entitlement.
What financial information should you exchange?
Exchange an accurate financial picture before agreeing to terms, including property, debts, income, superannuation and relevant business or trust interests. Material non-disclosure can support a fraud-based challenge. Keep the supporting records and identify valuation assumptions, so both lawyers can advise on the agreement’s practical effect and risks.
In a separation dispute, the continuing duty of disclosure extends to relevant direct and indirect financial circumstances. Do not assume that a prenup excuses concealment during related proceedings. Distinguish those litigation obligations from the preparation of an agreement before a relationship breaks down.
Does a prenup determine parenting or child support?
A financial agreement does not determine where children live or conclusively resolve parental responsibility. Parenting arrangements and child support have separate legal frameworks. A material change concerning a child’s care, welfare or development may also justify setting an agreement aside if the statutory hardship requirements are satisfied.
The birth of a child alone does not automatically cancel the agreement. Obtain separate advice about parenting arrangements and any binding child support agreement, rather than assuming a general financial clause settles those issues.
Can an agreement exclude spousal maintenance completely?
A financial agreement may address maintenance, but a blanket waiver is not necessarily decisive. Statutory requirements govern maintenance provisions, and the court retains power in specified circumstances involving inability to self-support without income-tested benefits when the agreement takes effect. Obtain advice on both the wording and its practical operation.
The maintenance beneficiary and attributable amount or property value must be identified as required. This statutory protection is not a general rule allowing every later financial difficulty to override an agreement.
Should you review a prenup after major life changes?
Review an agreement after significant events such as having children, serious illness, business restructuring or a major inheritance. Review helps identify unsuitable provisions and legal risks, but failing to review does not automatically invalidate the document. Any replacement or termination should follow the applicable statutory process with independent advice.
Do not rely on handwritten edits or an informal email to change the arrangement. Discuss future caring responsibilities, housing needs and changes in earning capacity during drafting, rather than leaving foreseeable issues unexplained.
What if you marry after making a de facto agreement?
A de facto financial agreement ceases to bind if the parties marry each other. Obtain advice before the wedding about an appropriate marriage agreement. Agreements can also be made during marriage, including after separation, or after a divorce order is made, under the provisions appropriate to that stage.
An overseas prenup is not automatically effective in Australia. Cross-border property and agreements require advice on the relevant jurisdictions.
What should you do before relying on or challenging an agreement?
Have a lawyer review the complete agreement, advice statements, financial disclosures and signing history before taking action. Check which provisions have become operative, including whether a separation declaration is required. If validity is disputed, obtain advice about negotiation, court remedies and any urgent steps needed to protect assets.
Keep drafts, correspondence and a factual chronology. Time limits for related property or maintenance applications depend on the relationship and any decision about the agreement; do not assume one universal deadline applies to every challenge.
How can CM Lawyers help with your financial agreement?
CM Lawyers can advise on prenuptial agreements, review an existing document and explain its effect on a proposed property settlement. Early advice helps identify disclosure gaps, drafting problems and concerns about pressure before positions become entrenched. Bring the signed agreement and supporting records to your consultation for a focused assessment.
For advice about preparing, reviewing or challenging a binding financial agreement, contact Christine Manolakos and the CM Lawyers team.
General information only, current at 3 November 2026. Have a lawyer check your agreement and circumstances before relying on this guide.
Key resources
Family Law Act 1975 — financial-agreement requirements, maintenance, termination and grounds for setting agreements aside.
FCFCOA guidance on financial agreements — scope, timing and mandatory independent legal advice.
Legal Aid NSW guidance on binding financial agreements — formal requirements, practical effects and overseas agreements.
Thorne v Kennedy [2017] HCA 49 — High Court judgment on undue influence and unconscionable conduct.
FCFCOA guidance on agreed financial arrangements — financial agreements and consent orders.
FCFCOA duty of disclosure — continuing financial disclosure in family-law disputes.
Attorney-General’s Department guidance on dividing property — the current property framework and June 2025 reforms.
FCFCOA guidance on parenting agreements — parenting plans and consent parenting orders.
Services Australia guidance on binding child support agreements — separate legal-advice and agreement requirements.
CM Lawyers — Property settlements — advice on dividing property, debts and superannuation after separation.
