How to Protect Your Assets Without a Prenup in Australia

You bought the house before you met them. Or you spent a decade building the business, and now someone new is moving in and you would rather not open a conversation with the word prenup.

The short answer is yes, you can protect assets without a prenup. No single method is bulletproof, though, and the informal steps most people lean on, keeping the title in your name and the money separate, usually will not survive a property settlement.

So this page names what actually works, what only looks like protection, and what it costs. The strongest option is still a properly made agreement, and I will be straight with you about why. We are a Sydney firm, so this is written with NSW readers in mind, but the rules below are Commonwealth law and apply across Australia.

Why keeping it “in your name” is not enough

The name that is on the title does not decide who keeps it. That is the part people find hardest to accept, and the reason most do-it-yourself protection fails.

When a marriage or a de facto relationship ends, a court can alter who owns what. It looks at the whole property pool, weighs what each of you contributed and what each of you will need going forward, then makes the division it considers just and equitable. Sole ownership is one fact in that exercise, not a shield.

Reference: Family Law Act 1975 (Cth), s 79 for married couples and s 90SM for de facto couples.

You do not need to be married for any of this to apply. Plenty of people assume there is a two-year clock and they are safe until it runs out.

It’s not just about living together for two years, which is a bit of a common misconception. It’s about how you lived.

Shared finances, a home you both treated as home, a child together: how you actually lived counts for more than how long.

The strongest protection: a binding financial agreement

We do not call it a prenup here, even though almost everyone still says it. The legal name is a binding financial agreement, or BFA, and it is the same idea with more rules attached.

Instead of leaving the split to a court’s discretion years from now, the two of you decide it in writing while you still get along. It is the closest thing to a lockbox Australian law gives you.

You can make one before you marry, during the marriage, or after it ends, and de facto couples have the same three options. For it to be binding, each of you must get independent legal advice from your own lawyer before signing. Not the same lawyer, not a quick read-through.

Reference: ss 90B, 90C and 90D (married) and ss 90UB, 90UC and 90UD (de facto); independent legal advice under s 90G and s 90UJ. See Family Law Act 1975 (Cth).

When an agreement can be thrown out

Here is where a lot of people get caught out. A financial agreement is not unbreakable. A court can set one aside for reasons including non-disclosure of assets, fraud, or duress (s 90K for married couples, s 90UM for de facto couples). Which means the cheap version is often the expensive version: the agreement that skips disclosure, or gets signed under pressure a week out from the wedding, is the one that collapses when you need it.

When an agreement will not hold

A client came to us wanting a prenup but we told them honestly it was a terrible idea. Now in this situation they’d been together for over 20 years, they had three kids and all of their assets were completely intertwined.

What sank it was not the length of the relationship. One of them had not disclosed everything they owned and would not give a value for their business. Without a formal valuation the agreement would have had a hole in it from day one. We told our client not to do it. An agreement protects you only when both of you put every card on the table.

Do discretionary trusts protect assets?

A discretionary trust can help. It is not a wall.

Where one partner controls the trust and can benefit from it, a court can treat what the trust holds as part of the property pool. That is the effect of Kennon v Spry [2008] HCA 56, and it catches the person who set up a trust, appointed themselves to every role, and used it like a second bank account.

There is a second limit. Shifting assets into a trust to defeat a claim does not put them beyond reach: a court can set that transaction aside, so the value is treated as still in play.

Reference: setting aside transactions that defeat a claim, s 106B Family Law Act 1975 (Cth).

A trust set up years earlier, run properly, with someone else genuinely in control, is a different proposition from one created six months into a relationship with your name on every line.

Protecting a business you built

This is where owners get the biggest shock. “I started it, I run it, my name is on it, so it is mine” is the exact belief that costs people the thing they spent years building.

I acted for an owner who was certain the company was untouchable because he ran it himself. Once we showed the business had been paying for the family’s lifestyle, it went into the property pool with everything else. Control and benefit is the test that matters, the same principle behind Kennon v Spry, and running the show yourself puts you on the wrong side of it.

The same test decides what a holding structure is worth to you. Putting business assets in a company or a family trust separates who legally owns them from who benefits, which is real protection when the structure predates the relationship and someone other than you holds genuine control. It stops working the moment the company is yours in all but name, or it starts paying for the family’s groceries and holidays.

I have seen what that costs from the other side of the table. We acted for a woman whose husband held a discretionary family trust he assumed was untouchable. Because he controlled it and used it for family expenses, we argued it was effectively part of the asset pool, and that made a six-figure difference in her final settlement. The trust did not fail because it was a trust. It failed because of how he used it.

What genuinely reduces your exposure:

• Structures set up early, before the relationship, and run at arm’s length.
• Records that show what the business was worth when the relationship started.
• An agreement that says what happens to the business if the relationship ends.

None of it makes a business invisible, and be sceptical of anyone who says otherwise. The goal is a clear value and a negotiated outcome, not an argued one.

Separate accounts and clean records: evidence, not protection

Keeping your money apart is worth doing, but be clear about what it buys you. Separate accounts, documented gifts, a written loan from your parents: all of it is evidence of who contributed what. It is not a quarantine.

Labels are the weak point. Calling a payment rent does not make it rent once a court looks at the relationship as a whole.

Ben and Lisa are not their real names; the facts are. Ben owned his house before his girlfriend Lisa moved in, and the title stayed one hundred per cent in his name. She paid him five hundred dollars a week for five years, which he treated as rent. They both chipped in on groceries and looked after the place. When they separated, she claimed half the house.

She got a small percentage of the house’s value, but definitely not half, because what we looked at was Ben’s initial contribution, which was huge. And Lisa did make financial contributions despite the agreement between them being considered rent, but the financial contributions were nowhere near enough to justify a 50-50 split.

Ben’s early contribution did the heavy lifting, not the word rent. Good records changed the size of the claim. They did not stop it being made.

The extras worth doing

Two more, provided you treat them as housekeeping rather than protection.

Review your will and your superannuation nomination. Pull both out and read what they actually say. The version sitting on file may be years old and may still name a former partner.

Write down gifts and loans. If your parents put money into your home, record whether it is a gift or a loan and have everyone sign at the time. Years later, memory is not evidence.

How a court decides, and the deadline that applies

There is no automatic 50-50 in Australia. A court weighs the contributions each of you made, financial and non-financial, then future needs such as earning capacity, health, and who is caring for the children, before landing on a just and equitable division.

Sometimes that is 50-50. Sometimes 60-40. Sometimes 70-30. There is no magic number, and anyone quoting you one before they have seen your figures is guessing. Working through the pool is the bulk of what a property settlement involves.

Then there is the deadline most people never hear about until it has gone. It is the window in which a property claim can be brought, including one brought against you: generally twelve months after a divorce becomes final, or two years from the day a de facto relationship ended. Once it closes, a claim needs the court’s permission to start at all, which is not a given.

Reference: time limits, s 44(3) (married) and s 44(5) (de facto), Family Law Act 1975 (Cth).

That deadline runs against the person who might claim what you own, not against you. Waiting it out is still a poor plan: permission to start late is not impossible to get, and an unresolved position is not a settled one. Better to close it off yourself, with an agreement or consent orders, so what you keep is decided rather than left open for someone else to test.

What holds up, at a glance

On cost, so it is not a surprise:

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

That is an agreement done properly, with advice on both sides. The discount version is the one that gets set aside.

Where to start

If you have a home or a business you would rather not put at risk, the next step is not another late-night search. It is a short conversation about which of these applies to you, and which would waste your money.

Call us on 1300 614 732 for a free discovery call. We will tell you plainly whether an agreement is worth doing in your case, and what else is worth putting in place while things are calm.