We have seen a noticeable rise in enquiries from clients considering entering into a Binding
Financial Agreement with their partner or spouse in contemplation of marriage or a de facto
relationship (commonly referred to as a “Relationship Agreement”).
In many cases, one partner enters the relationship in a substantially stronger financial
position than the other and seeks to safeguard their assets should the relationship come to
an end.
More widely known as “pre-nuptial agreements,” these Agreements are often portrayed in
the media as straightforward, practical tools for protecting assets. However, the reality is far
more complex.
At its core, a Relationship Agreement sets out how assets, liabilities, and financial resources
like as superannuation or inheritances (“separate property”) will be dealt with in the event of
separation.
Typically, these Agreements include provisions such as:
While these concepts may seem simple in principle, their proper legal implementation is
anything but.
With the rise of online legal services offering low-cost Relationship Agreements, there is
growing concern that insufficient care is being taken in their preparation.
A poorly drafted Agreement may ultimately be challenged and set aside by a court. The
result? What was intended to save money upfront could lead to tens of thousands of dollars
in litigation costs later.
In family law, cutting corners at the beginning can be an expensive mistake.
Many clients assume that if both parties have already agreed on the terms, the process
should be quick, simple, and inexpensive. There is also a belief that once a lawyer provides
advice and signs the required certificate, the Agreement automatically becomes binding and
enforceable.
Unfortunately, this is not the case.
Relationship Agreements are inherently complex because they attempt to regulate future
financial circumstances—circumstances that are, by nature, uncertain.
Lawyers are often asked to draft Agreements that will stand the test of time. However, no
one can predict what will happen over the course of a relationship. We often say “we don’t
have a crystal ball” to predict the future.
Changes that may impact the validity or fairness of an Agreement include:
These factors can render an Agreement unenforceable or “unfair” in the eyes of the law.
Preparing a Relationship Agreement requires considerable care, skill, and foresight.
Typically:
This process is not just a formality—it is essential to the Agreement’s validity.
The key question every client should ask is: “Will this Agreement genuinely protect me in
the future, or could it create more risk?”
If no Relationship Agreement is in place at the time of separation, the division of property is
determined under general family law principles. This typically involves a four-step process:
1. Identifying and Valuing the Asset Pool
All assets, liabilities, and financial resources are identified and valued, including
superannuation.
2. Assessing Contributions
An assessment of both the financial and non-financial contributions made by each party
including:
These contributions are assessed across the entire relationship—before, during, and after
separation.
3. Considering Current and Future Needs
Each party’s current and future circumstances are evaluated, including:
4. Ensuring a Just and Equitable Outcome
Finally, if in litigation, the Court determines whether the proposed division is fair and
reasonable in all the circumstances. This assessment is based on what is “fair at law” and
not what may be “morally fair”.
A Relationship Agreement is not just a document—it is a risk management tool.
Saving money on legal costs at the outset may seem appealing, but it can come at a
significant cost if the Agreement is later challenged or fails to operate as intended.
When it comes to protecting your financial future: You truly do get what you pay for.
Jacqueline Philip
Family Law Life
April 2026
