Most couples who sign a prenup are thinking about separation, not death. But death is a real possibility during any long relationship, and what happens to a binding financial agreement (BFA) when one partner dies is a question that catches many families off guard. The short answer is that the agreement does not simply lapse. Its terms can still apply, and the interaction with your estate plan can be complicated.
A prenup does not automatically terminate on death
Under the Family Law Act 1975 (Cth), a binding financial agreement operates as a contract between the parties. Contract obligations do not vanish when a party dies; they pass to that party's estate. This means the surviving partner and the deceased partner's estate may each have rights and obligations under the agreement that a court can be asked to enforce.
Whether a BFA survives death depends heavily on what the agreement itself says. A well-drafted prenup will include a clause that specifies what happens if one party dies. A poorly drafted one will be silent on the point, and that silence creates uncertainty at exactly the moment a grieving family can least afford it.
What the agreement says matters most
Some BFAs are drafted to operate only in the event of separation. If yours is written that way, it may not engage at all when a party dies. Others are broader and purport to govern how property is dealt with in any circumstance, including death. The distinction matters enormously in practice.
Three scenarios are worth understanding:
- Separation-only scope. The agreement does not apply. Property passes under the deceased's will or, if there is no will, under intestacy laws.
- Broad scope that includes death. The agreement may restrict or override what the surviving partner can claim from the estate, even if the will says something different.
- Silent drafting. Courts will interpret the agreement's intention. This is unpredictable and expensive.
This is one reason why what makes a binding financial agreement enforceable goes beyond the initial signing formalities. Long-term validity depends on careful, precise drafting from the outset.
The interaction with a will
A prenup and a will are two separate legal instruments, and they can conflict. If your BFA gives your partner a defined share of your assets on separation, but your will leaves everything to your children from a previous relationship, the surviving partner could be caught between competing claims. The BFA may give the surviving partner contractual rights. The children may have rights under the will. The result is litigation.
Courts have recognised that this tension exists. It is not resolved by assuming the will takes priority. The estate is bound by a valid contractual obligation just as any other party would be.
Updating your estate plan when you update your BFA is not optional; it's essential. The practical steps for doing that are covered in detail in our guide on how to update your estate plan after financial separation, which applies equally when reviewing your documents after any major life event.
Superannuation is a separate issue
Superannuation does not form part of a person's estate in the ordinary sense. It is held in trust by a fund trustee, who decides whether to pay a death benefit to a dependant or the estate. A BFA cannot override the trustee's discretion or a valid binding death benefit nomination (BDBN). Couples who use their prenup to address superannuation must understand this limit. The BFA may set out intentions, but the fund trustee is not a party to it and is not bound by it.
If you and your partner have agreed on how superannuation should be handled, a BDBN lodged directly with each fund is the mechanism that actually carries legal weight on death. Review it regularly, because nominations lapse or become non-binding if not renewed.
Claims against the estate by a surviving partner
Even where a BFA restricts what a surviving partner can claim, that partner may still have access to family provision legislation. In New South Wales, for example, the Succession Act 2006 (NSW) allows eligible persons, including spouses and de facto partners, to apply to a court for provision from an estate if the will leaves them without adequate support. A BFA can be relevant to whether a court grants such a claim, but it does not automatically prevent one.
De facto partners face the same risk. A de facto BFA can govern property rights during or after the relationship, but a surviving de facto partner's rights under state succession law are not automatically extinguished by a BFA. This matters particularly in blended family situations, where the deceased's children from an earlier relationship may be the primary beneficiaries of the will.
What to do now if your prenup is silent on death
If you signed a BFA without addressing what happens if one of you dies, the time to fix it is before that event occurs. You have two options: amend the existing agreement to include a death provision, or terminate it and replace it with a new one. Both paths require independent legal advice for each party, just as the original agreement did.
Reviewing the agreement every three to five years is a practical rule. Major life changes, including having children, receiving an inheritance, or starting a business, are all triggers for a formal review. The question of whether and how a prenup can be amended is one practitioners deal with regularly, so legal advice is available and the process is well-established under Australian law.
Rockwell Family Law Services can help
Rockwell Family Law Services advises clients on binding financial agreements at every stage: drafting, reviewing, amending, and understanding how a BFA interacts with estate planning documents. If you have an existing agreement and are unsure how it operates on death, or if you are negotiating a new prenup and want it to cover all foreseeable scenarios, contact Rockwell Family Law Services to discuss your situation. Getting the drafting right now is far less costly than resolving a dispute between a surviving partner and an estate later.