Pre-nuptial agreements are made by people who are intending to marry and are often made shortly before the date of marriage. If parties have no intention of marrying, then such agreements would normally be referred to as a de facto agreement or cohabitation agreement. The format of such cohabitation agreements may vary depending on what State or Territory the parties reside in.

A pre-nuptial agreement is a written agreement between a prospective husband and wife as to how they propose to deal with each other both during the marriage and in the event of a separation at least so far as financial matters are concerned. The agreement will usually provide how the parties propose to operate in respect of financial matters, as well as often providing what should occur in the event of the marriage breaking down including how specific assets are to be divided.

Traditionally, these agreements were common place and, indeed, essential as the law in the 19th century was that the husband had control over his wife’s assets in the absence of such agreement. In more recent times, pre-nuptial agreements fell out of fashion although they may become more popular in the future.

At present, the Family Law Act does not specifically recognise or enforce pre-nuptial agreements. The relationship between a pre-nuptial agreement and the Family Law Act in particular in relation to altering property interest, is not established. Undoubtedly it is a factor to be taken into consideration along with other factors by the court.

The Federal Government has indicated it intends to enact legislation which will essentially have the effect of making pre-nuptial agreements binding, subject to certain conditions. If that legislation is enacted, it will have a significant impact on pre-nuptial agreements and you will need to obtain legal advice in relation to that at that time.

A pre-nuptial agreement cannot oust the Family Court’s jurisdiction and Section 79 of the Family Law Act in relation to the property will still apply. If you require more information as to how the court will deal with your property in the event of a marriage breakdown, we suggest you refer to our free information on Property Settlement.

The pre-nuptial agreement cannot bind the Family Court. However it will often be taken into account by the court and may influence its decisions.

If there have been any transfers or dealings with property in reliance upon the pre-nuptial agreement, then Section 85A of the Family Law Act gives to the court the power to set such transfers or dealings aside if it considers it is fair to do so with respect to the whole or part of the property that is dealt with in that agreement. Indeed that section enables the court where it considers it just and equitable, to make orders in relation to any property which is dealt with in a pre-nuptial agreement.

At the very least, unless there is strong evidence to the contrary or evidence of duress, a properly drafted pre-nuptial agreement should provide clear evidence of what the assets of the parties were at the time of the agreement (that is prior to the marriage), and the values of those assets.

If the agreement has been made in good faith and particularly if there has been independent legal advice given to both parties, then the court may consider the terms of the agreement to be relevant.

However, if the parties to a marriage have subsequently acquired more assets together and/or they have not acted in accordance with the terms of their pre-nuptial agreement, then they cannot expect the court subsequently will enforce the terms of that agreement. It is likely that the court will make orders that are "just and equitable" in light of all the circumstances, which may well be something different from that anticipated by way of the pre-nuptial agreement. The Family Court when dealing with property following the breakdown of a marriage, is compelled by the Family Law Act to take into consideration many factors, some of which the parties to a pre-nuptial agreement may not even have contemplated.

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