Binding Financial Agreement

A Binding Financial Agreement, also commonly known as a BFA, is a private contract between two people that sets out how property, money, superannuation and, in some cases, spousal maintenance will be managed if the relationship ends.

People sometimes call them “prenups”, but they can be made at different stages of a relationship — before marriage or moving in together, during the relationship, after separation, or even following a divorce.

The main purpose of a Binding Financial Agreement is to give both parties certainty and peace of mind about what will happen if they separate. It allows you to decide these matters in advance, instead of leaving it up to a court later on.

There are many reasons people choose to put one in place. Some want to protect assets they owned before the relationship began, or make sure that an inheritance or family gift remains in their control. Others want to provide security for children from a previous relationship, or safeguard an interest in a family business.

For many, it is simply about avoiding conflict in the future by having clear, agreed-upon arrangements already written down.

Because the courts do not automatically check or approve these agreements, strict rules must be followed for them to be enforceable under the Family Law Act 1975 (Cth). The agreement must be in writing, signed by both parties, and each person must receive independent legal advice before signing.

That advice must cover how the agreement affects your rights and what advantages or disadvantages it brings. Each lawyer then signs a statement confirming that advice was given, and those statements are shared between the parties.

If these steps are not followed carefully, the agreement may not hold up later.

Yes. While a properly prepared Binding Financial Agreement (BFA) can be very secure, a court can set it aside in certain situations.

Superannuation can be included in a BFA, but there are extra rules to follow. For example, if the amount to be split is over the government’s “low rate cap” and the parties have not been separated for at least 12 months, the agreement may not be effective unless further requirements are met.

Once signed, a BFA remains in place unless both parties agree to end it. To cancel or replace it, the same legal process must be followed as when it was first made — that means new signatures, new advice, and new lawyer’s statements.

A BFA is a powerful tool for protecting assets and avoiding disputes, but it is also a technical document. Even small errors in drafting, or a lack of proper advice, can leave the agreement vulnerable to challenge. That is why it is essential to get clear, independent advice from a family lawyer who understands the complexities of these agreements.

We offer a 60 minute consultation with a Family Law Specialist that is affordable for you to garnish some initial guidance in relation to your position. Please contact us if you have any questions.