Navigating finances in a committed relationship can be challenging, especially when couples live together without marrying.
In Australia, "prenups" aren't just for the married. De facto couples can also protect their assets through legally binding agreements.
These agreements provide clarity, reduce conflict, and offer peace of mind. Unified Lawyers, a Sydney-based family law firm, has helped hundreds of clients across NSW draft enforceable Binding Financial Agreements (BFAs) tailored to de facto relationships.
What Is a De Facto Relationship?
Under the Family Law Act 1975 (s. 4AA), a de facto relationship is defined as two people (same or opposite sex) who live together on a genuine domestic basis but are not legally married or related by family. Key criteria include:
- Living together for at least two years
- Sharing finances or property
- Having or expecting a child together
- Registering the relationship in an Australian state or territory
Establishing a de facto relationship is not always straightforward, especially when it comes to short-term relationships or unconventional living arrangements.
The court considers the totality of the relationship-such as mutual commitment, joint purchases, shared bank accounts, and even social perception-to determine its de facto status.
Some couples are surprised to learn they may already meet the criteria without even realising it.
For instance, living apart due to work obligations or maintaining separate bank accounts doesn't automatically exclude a couple from being recognised as de facto. Each case is assessed on its individual facts.
For more details, refer to the Federal Circuit and Family Court of Australia (FCFCOA) website.
Why Consider a Prenup in a De Facto Relationship?
Creating a prenup (officially called a Binding Financial Agreement) can help de facto couples :
- Protect individual assets brought into the relationship
- Safeguard business interests or inheritances
- Clarify financial arrangements in blended families
- Reduce conflict and legal costs if the relationship ends
- Establish certainty for future asset planning
Case study example :
A Unified Lawyers client entered a de facto relationship after inheriting a property from her parents.
A prenup ensured the property remained solely hers, even if the relationship broke down. Similarly, business owners often use BFAs to shield their companies from future disputes.
These agreements are especially important for high-net-worth individuals, those with children from previous relationships, or partners entering with significantly different financial positions.
A well-drafted BFA can also provide peace of mind for family members concerned about intergenerational wealth being lost in the event of a breakup.
It's also a practical solution for couples who want financial independence while still being emotionally and legally committed to one another.
Transparency about money matters early on often strengthens the relationship.
Legal Standing of Financial Agreements in De Facto Relationships
Binding Financial Agreements (BFAs) for de facto couples are recognised under the Family Law Act 1975 :
- Section 90UB : Before living together
- Section 90UC : While already in a de facto relationship
A BFA operates as a contract between the parties. For a BFA to be legally binding, it must meet strict requirements :
- Be in writing and signed by both parties
- Include full financial disclosure
- Each party must receive independent legal advice from a qualified lawyer
- Lawyers must sign a statement confirming this advice was given
Courts retain the power to set aside a BFA in limited situations-for example, if there's evidence of fraud, non-disclosure, undue influence, or significant change in circumstances (such as a child's birth).
It's essential to get legal advice not just when drafting the agreement, but also during renegotiations or if your circumstances change significantly over time.
For example, if you receive a major inheritance, sell a business, or have a child, it may be wise to review and potentially update your BFA.
More information can be found via the Attorney-General's Department and the Family Law Act.
How to Create a Binding Financial Agreement (BFA)
Follow these steps to ensure your prenup is enforceable :
- Mutual Agreement : Both parties must willingly agree to the terms.
- Full Disclosure : Each party should disclose all assets, debts, income, and liabilities.
- Independent Legal Advice : Each partner must receive legal advice from separate lawyers.
- Drafting the Agreement : A family lawyer will prepare the BFA according to your specific circumstances.
- Signing and Certification : Both parties sign the document, and lawyers provide statements of legal advice.
- Storage and Safekeeping : Keep the signed copies in a safe and accessible place.
Looking for guidance?
Download our binding financial agreement checklist to ensure you've covered every step.
Creating a prenup is not just a box-ticking exercise. It's an opportunity to have open, honest conversations about your financial goals and values.
These conversations often strengthen the relationship and create a solid framework for decision-making in the future.
Key Clauses to Include in a De Facto Prenup
| Clause Category | Common Inclusions |
|---|---|
| Existing Assets | Property, vehicles, investments owned before relationship |
| Future Earnings | Income streams, business profits, bonuses |
| Property Settlement | How assets will be divided if relationship ends |
| Superannuation | Treatment of each party's superannuation interests |
| Debts and Liabilities | Responsibility for mortgages, credit cards, personal loans |
| Spousal Maintenance | Whether any ongoing financial support will be paid post-breakup |
| Dispute Resolution | How disagreements over the agreement will be resolved |
It's also wise to include a clause for periodic review of the agreement.
Life changes, and your financial arrangement should adapt accordingly.
A review clause allows both parties to revisit the terms every few years or upon significant life events such as the birth of a child, a property purchase, or a major career shift.
Every agreement should be customised to reflect the couple's unique situation.
A cookie-cutter template won't cut it when your future is on the line.
Unified Lawyers can help you prepare a clear, enforceable BFA.
Common Misconceptions About De Facto Prenups
- "We don't need a prenup because we trust each other." Trust is essential, but so is planning. A prenup helps both parties understand expectations before things get complicated.
- "Only rich people need prenups." Not true. Anyone with assets, debt, children, or business interests should consider a BFA.
- "We've only been together a short time, so it doesn't matter." Even short-term relationships can qualify as de facto under law, especially if there's cohabitation and financial intermingling.
- "It's unromantic." A prenup isn't about distrust-it's about open communication and mutual respect. Think of it like a seatbelt: you hope you won't need it, but it's smart to have it just in case.
- "Prenups never hold up in court." While courts can set aside BFAs in rare cases, well-drafted agreements that meet legal requirements are generally enforceable.
Frequently Asked Questions
1. What is the cost of a de facto prenup?
Costs vary depending on complexity but typically range from $3,000 to $6,000.
This includes legal advice for both parties, drafting the document, and ensuring compliance with the Family Law Act 1975.
More complex arrangements-such as those involving trusts, business entities, or overseas assets-may cost more.
Seek a personalised quote from experienced family lawyers in Sydney.
2. Is a prenup enforceable in Australia?
Yes, if it complies with the Family Law Act 1975 requirements.
Courts may set aside agreements if they are found to be unjust, improperly executed, or if there's been a material change in circumstances.
Getting the right legal advice from the outset significantly reduces this risk.
3. Can we write our own agreement?
Technically yes, but it won't be binding unless both parties receive independent legal advice.
DIY agreements often fail to hold up in court due to legal and procedural flaws.
You're much better off working with a qualified lawyer who understands the complexities of de facto relationships.
4. Do we need to register our prenup?
No, BFAs are private agreements and do not need court registration to be valid.
However, both parties should retain signed copies, and it's a good idea to inform your accountant or financial adviser that the agreement exists.
5. What if one party refuses to sign?
You cannot force someone to sign a BFA.
However, discussions with a family lawyer can help explore other protective legal options like a cohabitation agreement or property trust.
It's important to enter into a BFA freely and without pressure for it to be valid.
How Unified Lawyers can help
A de facto financial agreement is a powerful tool for protecting your assets, clarifying financial expectations, and minimising disputes.
Whether you're moving in together, planning your future, or wanting to protect your property and financial interests, our experienced family law team can guide you every step of the way.
At Unified Lawyers, we've helped over 100 de facto couples in NSW and QLD draft clear, enforceable BFAs tailored to their unique needs.
We prioritise transparency, legal accuracy, and compassion, ensuring every agreement stands up to scrutiny and reflects both parties' intentions.
Our services include :
- Strategic legal advice tailored to your situation
- Full drafting and review of BFAs
- Coordinating with accountants or financial advisers (if needed)
- Ongoing support if disputes or renegotiations arise
- Support for updating BFAs if your life circumstances change
We understand that these conversations can feel overwhelming. That's why we approach every case with sensitivity, ensuring your needs are met with care and professionalism.
If you're considering a prenup for your de facto relationship, get in touch with Unified Lawyers today. We offer free consultations and are ready to help you move forward with confidence and peace of mind.
Conclusion
A de facto prenup offers clarity and protection, helping couples define financial expectations and avoid future disputes. It's not just about dividing assets-it's about building a strong foundation.
By working with experienced professionals like Unified Lawyers, you can ensure your agreement is both fair and legally sound.
Take the time to protect what matters most. Whether you're newly in love, blending families, or preparing for a major life change, a Binding Financial Agreement can provide the peace of mind you both deserve.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
