Do Pre-Nups Help or Hurt Relationships? What the Research Says About Binding Financial Agreements in Australia

Binding Financial Agreements – commonly referred to as "pre-nups" – are becoming more common in Australia, particularly among couples who are entering second marriages, have significant assets, or want to plan ahead for the future. But a question that often arises is: Do BFAs make couples more likely to separate – or less?

Let’s unpack what we know about these agreements, and what the research says (and doesn’t say) about their impact on relationships.

What Is a Binding Financial Agreement?

A Binding Financial Agreement (BFA) is a legal contract made under the Family Law Act 1975 (Cth). It can be entered into before, during, or after a marriage or de facto relationship. The agreement typically sets out how property, finances, and spousal maintenance will be dealt with if the relationship breaks down.

BFAs are commonly used to:

• Protect pre-existing assets (e.g. from a previous relationship)

• Manage financial risks for business owners

• Provide certainty in the event of separation

• Reduce the risk of drawn-out court proceedings

Do BFAs Affect Separation or Divorce Rates?

This is a natural and important question – but the short answer is: we don’t know for sure.

There is currently no official Australian data showing the rate of separation or divorce for couples who enter into BFAs compared to those who do not. Neither the Australian Bureau of Statistics nor the Family Court tracks divorce outcomes by BFA status.

However, some key observations can be made:

1. BFAs Are More Common in Higher-Risk Situations

Most BFAs are signed by:

• People with significant assets or complex financial structures

• Couples entering second or third marriages

• Individuals with children from previous relationships

These types of relationships statistically have higher separation risks to begin with. So BFAs may reflect existing risks, rather than cause them.

2. No Evidence That BFAs Increase Divorce Rates

There’s no research in Australia or overseas suggesting that having a BFA leads to higher separation rates. In fact, some studies from the U.S. and Europe suggest that prenups may reduce conflict during a relationship, as they clarify expectations.

3. Transparency and Fairness Matter

The High Court decision in Thorne v Kennedy [2017] HCA 49 confirmed that BFAs can be set aside if they are entered into under pressure, or if they are unfair at the time of signing or enforcement. This highlights the importance of:

• Independent legal advice

• Fair negotiation

• Proper disclosure

A well-drafted BFA that is entered into freely and fairly is more likely to withstand scrutiny – and more likely to support the relationship rather than damage it.

Should You Consider a BFA?

A Binding Financial Agreement is not just for the wealthy. It can be a practical tool for:

• Couples bringing unequal assets into the relationship

• Families concerned about preserving inheritance or business interests

• Anyone who wants peace of mind and financial clarity

When handled with care, BFAs can actually strengthen trust between partners by setting out clear expectations from the start.

Final Word

BFAs are a valuable legal tool, but they are not a magic shield – nor are they a sign that a relationship is doomed. As with any legal agreement, the process matters as much as the outcome. If approached openly and fairly, a BFA can offer peace of mind and reduce uncertainty for both partners.