Binding financial agreements: what makes them stick

Family Law20 January 20265 min read

The agreements couples make about money, before a relationship, during it, or as it ends, go by different names in different places, but the popular one is the “prenup”. Their whole value is certainty: an agreed answer to how property would be divided, settled in advance and away from the strain of a separation. Yet certainty is exactly what a poorly made agreement fails to deliver, because an agreement that can be set aside provides none at all. The interesting question is not whether you can make one, but what makes one actually stick.

What these agreements can do

Where the law permits them, financial agreements let a couple decide for themselves how their assets and finances would be divided if they separated, rather than leaving it to a court to weigh contributions and needs after the fact. They can be made before a relationship or marriage, during it, or after separation to formalise a settlement. Used well, they protect assets brought into a relationship, clarify expectations, and spare a couple the cost and uncertainty of litigating the question later.

The formalities are not optional

These agreements are unusual in how strictly their validity depends on process. In many jurisdictions each party must receive independent legal advice before signing, genuinely independent, from their own lawyer, and that advice must often be certified. The agreement must be properly written and signed in the required form. These are not bureaucratic flourishes: skip them and a court may treat the agreement as never having been binding at all, which defeats the entire point of making one.

Why a court might still set one aside

Even a properly executed agreement can be undone in defined circumstances. Common grounds include a failure to disclose significant assets, fraud, duress or undue pressure, the classic example being the agreement presented days before a wedding, when refusing feels impossible, or a change in circumstances so significant, such as the arrival of children, that holding a party to it would work a serious injustice. The theme is fairness in the making: an agreement built on full disclosure and unhurried, independent advice is far harder to dislodge.

Making one that lasts

The practical lessons follow directly. Start early, not on the eve of the wedding. Disclose everything, honestly and in full. Ensure each person has their own lawyer and real time to consider the advice. And revisit the agreement as life changes, marriage, children, a major asset, since an arrangement fair at the outset can drift out of step with reality. An agreement is also a natural prompt to review your will and estate plan so the two align. This article is general information only and is not legal advice; the rules on financial agreements vary significantly by jurisdiction, so obtain your own independent advice before making or signing one.