Conversations about money have long been considered a romance killer, but for a growing number of financially literate young Australians, discussing finances openly is becoming a cornerstone of modern relationships. Prenuptial agreements, formally known as binding financial agreements (BFAs) in Australia, are experiencing a significant surge in popularity, particularly among younger generations.
The New Face of Financial Planning in Relationships
Take Caitlin Stinson, 29, and Andrew Gibbon, 27, a recently-engaged couple from Canberra. They have maintained complete transparency about money since they began dating nearly six years ago. While they do not plan to sign a BFA themselves, they acknowledge that many of their peers are choosing to do so. Their approach involves splitting all expenses evenly, from dining out and groceries to furniture and holidays, keeping their bank accounts separate.
"I hate math, I hate doing financial things. I'd rather just call it 50/50, it's fine," Caitlin says. Andrew, whose parents separated, initially assumed a prenup would be necessary but has since embraced a partnership built on trust. "For me, it was a big thing... I'd seen two very nasty versions of a breakup happen," he admits. "It was actually a bit of an unpicking for the relationship, for me personally, to be like, 'No, I trust this person enough to give them that as well.'"
A Shift in Motivations
Contrary to common assumptions, the rising interest in BFAs is not primarily linked to divorce rates, which have been declining in recent years. Instead, family lawyers point to several key factors driving this trend.
- Inheritance and Wealth Transfer: Australia is on the cusp of a massive intergenerational wealth transfer from Baby Boomers to their descendants. This impending influx of inheritance money is prompting many individuals to seek certainty about how such assets would be treated in the event of a separation.
- Family Influence and the 'Bank of Mum and Dad': Parents who provide financial assistance for home purchases or other major expenses are increasingly encouraging their children to sign BFAs to protect that family contribution.
- Changing Relationship Landscapes: With higher rates of divorce and more people entering second or third marriages, there is a growing desire to avoid contentious financial settlements in the future. "There's a bit of an extra appetite to say, 'Oh yeah, a BFA, sounds like a great idea. I can avoid having a messy property settlement next time,'" explains family lawyer Jacquelyn Curtis.
- Blended Families: As the traditional nuclear family model becomes less common, with children from previous relationships involved, BFAs offer a way to clarify financial responsibilities and protect assets for all parties.
The Practicalities and Costs
Signing a BFA is a serious financial and legal undertaking. The process typically costs each party between $10,000 and $15,000, as both individuals must be independently represented by their own lawyers. The agreement cannot be one-sided and is designed to be a collaborative, rather than adversarial, process.
Family lawyer Jono Naef emphasises that marriage or a de facto relationship is one of the most significant financial decisions a person can make. "It's one of the only things that they ever do that if it goes south, is going to cost them a lot of money, and they get no advice around it," he notes. Lawyers caution couples against rushing the process, especially close to a wedding date, to avoid undue pressure.
Communication is Key
Whether or not a couple ultimately signs a BFA, legal experts universally advocate for open and honest financial discussions. Victoria Blakeley, a family lawyer and marriage celebrant, observes that the couples seeking BFAs are often savvy, informed, and research-driven. "They're actually just trying to avoid drama and cost," she says.
For Andrew and Caitlin, their candid communication about money has solidified their partnership. They even joke about what a hypothetical BFA might include, with Caitlin confidently stating she would get their dog, Smudge. Their story reflects a broader cultural shift where financial transparency is increasingly viewed not as a threat to romance, but as a foundation for a secure and equitable partnership in an era of complex family dynamics and significant wealth transfer.
