A postnup, short for postnuptial agreement, is a legal contract you and your spouse can enter into after marriage that sets out how your assets, property, debts, and financial responsibilities would be divided if you were to separate or divorce.
Unlike a prenup, which is signed before marriage, a postnup is created during the marriage to provide clarity and certainty about financial arrangements moving forward.
Key takeaway: A postnup allows you to make legally binding financial arrangements during your marriage, not just before it.
What Is a Postnup Agreement?
A postnup agreement is a written and legally enforceable contract between you and your spouse.
It typically includes details about property ownership, financial contributions, and how assets will be managed or divided in the event of separation, divorce, or even death.
For some couples, this agreement becomes necessary due to changes in financial circumstances, business growth, inheritances, or simply the desire for peace of mind. By setting expectations clearly, both partners know where they stand, which can reduce disputes in the future.
Key takeaway: A postnup clarifies how finances and assets will be handled if your relationship ends, offering you certainty and reducing future conflict.
Why Would You Need a Postnup?
There are several reasons you might consider a postnup:
- Changed circumstances: Perhaps your financial situation has shifted since getting married. One of you may have inherited property, started a business, or accumulated significant assets.
- Debt protection: If one spouse has debts, a postnup can protect the other spouse from liability.
- Second marriages and blended families: You may want to ensure children from previous relationships are provided for.
- Peace of mind: Some couples simply want reassurance that both parties agree on how things would be resolved if the marriage ended.
Key takeaway: A postnup can adapt to new life circumstances, helping you safeguard assets and provide financial security for yourself and your family.
Is a Postnup Legally Binding in Australia?
Yes, postnup agreements are recognised under the Family Law Act 1975 as Binding Financial Agreements (BFAs). For a postnup to be enforceable, both you and your spouse must obtain independent legal advice from separate lawyers. Each lawyer must provide a certificate confirming that advice was given.
However, a court can set aside a postnup if it finds evidence of fraud, duress, unconscionable conduct, or if circumstances change significantly, such as the care of children not being adequately provided for.
Key takeaway: A postnup is binding if it meets strict legal requirements, but it must be entered into freely and fairly.
Postnup vs Prenup
The main difference between a postnup and a prenup is timing. A prenup is created before marriage, while a postnup is made after. Both agreements serve the same purpose: to establish financial arrangements in the event of separation.
For couples who didn’t sign a prenup but later wish to protect their assets, a postnup provides a similar level of legal protection.
Key takeaway: A postnup gives you the same benefits as a prenup, but it’s signed during the marriage rather than before.
Advantages and Limitations of a Postnup
Advantages:
- Provides certainty around financial arrangements.
- Protects assets such as businesses, property, and inheritances.
- Helps reduce the cost and stress of disputes if separation occurs.
- Supports estate planning for blended families.
Limitations:
- Can be expensive, as both parties need independent legal advice.
- May be challenged in court under certain conditions.
- Requires complete honesty about financial disclosure from both spouses.
Key takeaway: A postnup offers peace of mind and protection, but you need full transparency and legal guidance for it to hold up.
Should You Get a Postnup?
Whether a postnup is right for you depends on your personal situation. If your financial circumstances have changed since marriage, if you own or are building a business, or if you want to protect your children’s inheritance, it may be worth considering.
Discussing a postnup doesn’t mean you expect your relationship to fail. Instead, it can show a proactive approach to protecting both yourself and your spouse.