Binding Financial Agreements

A Binding Financial Agreement (BFA) is a private contract that lets a couple decide for themselves how their property, finances and spousal maintenance will be dealt with — instead of leaving it to a court. Often called a "prenup" when made before marriage, a BFA can in fact be made at three different stages: before a relationship or marriage, during it, or after separation. At Bruce Dulley Family Lawyers we draft and advise on Binding Financial Agreements for couples throughout Brisbane who want certainty and control over their financial future.

People choose a BFA for many sensible reasons. One partner may be bringing significant assets, a business or an inheritance into the relationship and wants to protect it. A couple entering a second marriage may want to preserve assets for children from a previous relationship. Business owners and their partners may want to keep the business out of any future dispute. And after separation, a BFA can be used as an alternative to Consent Orders to finalise a settlement. In each case the goal is the same: to remove uncertainty and avoid expensive litigation down the track.

A BFA can cover how property and financial resources are to be divided if the relationship breaks down, and whether spousal maintenance will be paid. Both married couples and de facto couples — including same-sex couples — can enter into one under the Family Law Act 1975 (Cth). Because a valid BFA effectively ousts the Court's usual power to adjust property, the law sets strict requirements to protect both parties.

For a Binding Financial Agreement to be legally enforceable, each party must receive independent legal advice from their own lawyer before signing — advice about the effect of the agreement on their rights and the advantages and disadvantages of entering into it. Each lawyer must provide a signed statement confirming that advice was given. The agreement must be in writing and signed by both parties, and each party must keep a copy. These safeguards exist because a BFA asks people to give up rights they would otherwise have, so the law insists they do so with their eyes open.

It is equally important to understand that a BFA is not bulletproof. A court can set one aside in certain circumstances — for example, if it was obtained by fraud, if one party failed to disclose significant assets, if it was signed under duress or undue pressure, if it is found to be unconscionable, or if circumstances have changed so much (such as the birth of a child) that enforcing it would cause hardship. The most common reasons agreements fail are rushed drafting, inadequate disclosure and pressure applied close to a wedding date. The way to reduce these risks is careful preparation: full financial disclosure on both sides, genuine independent advice, fair terms, and enough time before signing. We build agreements to last, not to be challenged.

We can act either for the party proposing an agreement or for the party being asked to sign one. If you have been presented with a BFA, do not sign it without proper advice — once signed, it is very difficult to undo, and you may be giving up substantial entitlements. If you are proposing one, getting the drafting and process right is what gives the agreement its strength.

A well-drafted BFA brings peace of mind and protects relationships from the strain of financial uncertainty. Every family law matter is different. The information on this page is general only and is not legal advice. To discuss your situation in confidence, request a confidential consultation with our Brisbane family law team.