Postnuptial Agreements in Australia: What it is and What it Covers

Maybe an inheritance is about to land in your lap. Maybe the side business you started has quietly become the thing that pays the bills. Or maybe you and your partner have come through a rough patch and want something solid in place before life throws the next curveball.

If that sounds familiar, a postnuptial agreement is worth understanding. The short answer? A postnuptial agreement in Australia is a binding financial agreement made during your marriage under section 90C of the Family Law Act 1975. It is legally enforceable when it is done properly. And no, it is not just for the wealthy. Done right, it can save a couple a lot of stress down the track.

It is one type of financial agreement recognised under Australian family law. Here is what makes one hold up, what it can and cannot do, what it costs, and when a court can tear it up.

Is a postnuptial agreement legally binding in Australia?

Yes, when it meets the requirements in section 90G of the Family Law Act 1975. The following things have to line up:

• The agreement must be in writing, and both of you sign the agreement.
• Each of you gets independent legal advice from your own lawyer, before signing, about how the agreement affects your rights and where it helps or hurts you.
• Each lawyer signs a statement confirming that advice was given, and exchanges these with the other party.
• The agreement has not been set aside by a court.

That independent-advice rule is the one people trip over. You each need your own lawyer, not a shared one. It is not a box-ticking exercise. The advice requirement exists to ensure each party is making an informed decision about signing.

It’s also crucial that neither person signs under pressure, undue influence or duress, as the contract is generally voidable.

When should you consider a postnuptial agreement?

A postnup usually comes up when something changes. The common triggers:

• An inheritance is coming. You want the money your parents worked their whole lives for to stay in the family, not become part of the pool if you separate.
• One of you owns or is starting a business. A business you built, or a stake with other partners in it, is exposed in a settlement unless you plan for it.
• A blended family. You have children from an earlier relationship and want to be clear about what is set aside for them.
• One of you is bringing in debt. You want it clear whose debt is whose.
• You are rebuilding trust. After a difficult stretch, some couples want the financial side settled so they can focus on the relationship.

You do not need all five. One is usually enough to make the conversation worth having.

How is a postnup different from a prenup?

The only real difference is timing. Both are binding financial agreements under Part VIIIA of the Family Law Act 1975. A prenup is signed before you marry. A postnup is signed during the marriage. Same instrument, same requirements, same law. If you are not married yet, a prenup is the version you want.

What can a postnuptial agreement cover?

It deals with the financial side of your relationship. That includes:

• Property and assets, and how they are divided if you separate.
• Debts, and who carries them.
• Spousal maintenance.
• A business or company interest.
• How an inheritance or a gift is treated.

It can also deal with superannuation. Super is treated as property in a family law settlement, and a postnup can set out how it is split, provided the super side meets the same independent-advice requirements as the rest of the agreement.

There is a hard limit. A postnup cannot decide parenting arrangements or child support. Those are handled separately, through a parenting plan, court orders, or a binding child support agreement. No financial agreement can sign away a child’s entitlements or lock in who the children live with.

How much does a postnuptial agreement cost?

A postnup is the same binding financial agreement as a prenup, so it costs much the same to do properly. Here is how I put it:

“It’s not cheap. You both need separate lawyers, and a properly drafted prenup can cost anywhere between five to ten thousand dollars.”

Most of that goes to two things: drafting the agreement, and each party’s independent legal advice, which two separate lawyers have to provide. A straightforward agreement between two people with simple finances sits at the lower end. Once a business, a trust, or complex assets are involved, it costs more, because there is more to value and more to get right. It is money spent up front to avoid a far larger dispute later.

Can a postnuptial agreement be set aside?

Yes. A court can set one aside under section 90K of the Family Law Act. The main grounds, in plain English:

• The agreement was obtained by fraud, including hiding a significant asset.
• One party did not make full and frank disclosure of their finances.
• The agreement is impractical to carry out.
• Circumstances have changed in a way that affects the care of a child and would cause hardship.
• One party acted unconscionably, for example by applying pressure or exploiting the other’s position.

The leading case is Thorne v Kennedy [2017] HCA 49, where the High Court set aside both a prenup and a near-identical postnup for undue influence and unconscionable conduct. The practical lesson is the whole reason the independent-advice and no-pressure rules exist: an agreement signed freely, with proper advice on both sides, is the one that holds. A property settlement fought out in court is exactly what a well-drafted postnup is meant to avoid.

The honest downsides

A postnup is not free, and it is not always an easy conversation. Raising it can feel unromantic, and some people worry it signals a lack of trust. Those are fair concerns. The bigger risk is a badly drafted or rushed agreement: the one signed under time pressure, without proper advice, is the one most likely to be challenged and unwound. If you are going to do it, do it properly or not at all.

A real outcome

Let me tell you about a client. Call him Ben. He had a house he had worked hard for and wanted to keep, and he had met someone, Sarah, who was moving in and starting to chip in. He was uneasy about what would happen to the house if things did not last. So we sorted it out with a binding financial agreement (BFA).

“So Ben came to us and we had some really honest chats, and we worked out a BFA that said the house would stay with Ben, but if Sarah was making contributions towards the house they would take note of those contributions, and if they did separate she would be paid back those contributions plus a little bit extra as well.”

Five years on, they did separate. The financial side was already settled. There was no fighting and no court, and both of them walked away calling it fair. That is what a good agreement does. It is the one nobody has to argue over.

Where to from here

A postnup will not fix a relationship, and it is not right for everyone. But for the right couple, at the right time, it takes one big source of worry off the table so you can get on with your life.

If you are weighing one up, book a chat with me and my team. We will walk you through whether a binding financial agreement makes sense for you, no pressure and no judgment, just honest advice. Call 1300 614 732 or book a free discovery call.