Intergenerational Wealth and Family Law

21 October 2026

Parents are often a source of funds or assets for their children, particularly in relation to the purchase of a new home.

One way to secure the parents’ contribution and the parties’ position is to enter into a Financial Agreement under the Family Law Act (commonly called a “Binding Financial Agreement” or a “pre-nuptial” Agreement).  The Agreement determines how the parties’ property and finances (including spousal maintenance) will be dealt with if and when they separate. These Agreements can be entered into before, or during, a relationship. 

The benefit of Financial Agreements are that they provide peace of mind, by giving the parties certainty and control over their assets and spousal maintenance. They also reduce or avoid the conflict, cost and delay usually associated with property division. Another benefit is that the division is handled confidentially, avoiding the parties’ financial affairs being scrutinised by forensic accountants, the ATO or the Court.  The cost of a Financial Agreement is usually significantly less than the costs otherwise incurred by parties in dividing their property.

A common feature of Financial Agreements is that they “quarantine” from division, the property and superannuation owned by the parties at the time of the agreement, as well as any future growth in that property, and also any liabilities.  The Agreement can be as flexible as the parties wish it to be, and provide for changes in circumstances, such as whether the parties have children, or whether they expect to receive any inheritances or gifts from their family in the future. The Agreement can also provide for how any property jointly acquired by the parties after the Agreement is entered into, is to be divided.   

For a Financial Agreement to be enforceable, both parties have to receive independent legal advice about the consequences, and advantages and disadvantages, of entering into the Financial Agreement. 

Common scenarios where parties enter into Financial Agreements, are where there is a need for protection of intergenerational family wealth for either one or both parties, and where the parties have a significant disparity in their financial circumstances (particularly where one or both parties are entering into a second relationship). 

To discuss Financial Agreements, please contact Joanne Randello or James Pergl of our office.