When couples decide to start a life together, discussing what might happen in the event of separation may feel unromantic, but it’s often one of the most practical conversations to have.
In Australia, Binding Financial Agreements (BFAs), commonly referred to as “prenups”, provide a legal framework to protect both parties’ interests should the relationship end.
At Ramsden Family Law, our family lawyers provide thoughtful, strategic advice to ensure your financial future is protected with clarity and care.
What Is a Binding Financial Agreement (BFA)?
A Binding Financial Agreement is a legal document that outlines how property, finances, and spousal maintenance will be handled if a relationship breaks down.
It’s available to both married and de facto couples and can be entered into:
- Before a relationship or marriage (as a prenup)
- During a relationship or marriage
- After separation or divorce
Unlike Consent Orders, BFAs are private agreements that don’t require court approval but must meet strict legal requirements to be enforceable.
What Do BFAs Cover?
A well-drafted BFA can address a wide range of financial matters, including:
- The division of real estate, personal property, businesses, trusts and shares
- Treatment of superannuation and inheritances
- Allocation of debts and liabilities
- Future financial support (spousal maintenance)
- Protection of family wealth or inheritances from previous relationships
Whether you are safeguarding personal assets or planning for financial certainty, a BFA provides clear, enforceable terms.
When Is a BFA Particularly Useful?
While any couple can benefit from a BFA, they are especially useful in certain situations:
1. Second Marriages or Blended Families
A BFA can ensure children from previous relationships receive their intended inheritance and prevent future disputes over assets brought into the new relationship.
2. Unequal Financial Positions
If one party brings significantly more wealth into the relationship, such as a business, property portfolio, or anticipated inheritance, a BFA helps to define asset ownership clearly.
3. Business Protection
For business owners, a relationship breakdown can place a business at risk. A BFA can limit exposure by outlining how a business interest will be handled, including valuation methods and payment structures.
4. Gifts or Inheritances from Family
BFAs are often encouraged when parents gift property or financial assistance to their children and want assurance that those assets will remain protected if the relationship ends.
What Makes a BFA Legally Binding?
To be enforceable, a Binding Financial Agreement must meet strict legal criteria under the Family Law Act 1975.
This includes:
- The agreement must be in writing
- Both parties must receive independent legal advice
- Lawyers must sign a certificate confirming advice was given
- The agreement must not be obtained by fraud, coercion, or duress
While the object of a BFA is to oust the jurisdiction of the court, or in other words take away the court’s power to hear or decide a case, there are some situations where the court will intervene, upon a party making an application to the Court. In those circumstances, the Court has wide discretionary powers and can determine that one or a number of the legal criteria above have or haven’t been satisfied.
At Ramsden Family Law, we take every precaution to ensure your agreement is both compliant and tailored to your unique circumstances.
Is a Prenup Right for You?
If you’re considering marriage or moving in with a partner, and especially if you’ve built significant assets or have family obligations, it may be wise to consider a BFA. While it may feel uncomfortable to plan for the “what ifs,” a BFA often brings peace of mind, helping couples start their journey on clear financial terms.
Learn more about prenups in our recent article on ‘The Basics of Prenuptial Agreements‘.
How Ramsden Family Law Can Help
Our experienced family lawyers work closely with clients to draft and review Binding Financial Agreements, to negotiating fair terms that reflect your goals and circumstances. We understand that every relationship is different, and we tailor our approach to suit your needs with empathy, precision, and professionalism.
Find out more about our prenups and financial agreement services.
Book a Consultation Today
Whether you’re exploring a prenup or need guidance on financial planning for your relationship, Ramsden Family Law is here to help.
Book your free 30-minute consultation today and gain confidence in your financial future.
