What Is a Binding Financial Agreement in Australia?
A plain English explanation of what BFAs are, how they work, and why they matter.
The formal name for a prenup
In Australia, what most people call a prenup is formally known as a Binding Financial Agreement, or BFA. These agreements are created under Part VIIIA of the Family Law Act 1975, which governs financial agreements between married couples, and Part VIIIAB, which covers de facto couples.
The term "prenup" is widely understood but is not used in Australian legislation. When lawyers and courts discuss these agreements, they use the term Binding Financial Agreement.
What a BFA actually does
A BFA allows couples to set out in advance how their property and finances will be divided if the relationship ends. Rather than leaving that decision to a court, the couple documents their own agreed arrangements.
Think of it as a financial plan for a scenario neither partner wants — but one where having clarity ahead of time prevents conflict, cost, and uncertainty later.
A BFA can cover property owned before the relationship, property acquired together, debts, business interests, superannuation, inheritances, and what happens financially on separation.
When can a BFA be created?
BFAs are not only for couples about to marry. They can be created at several points:
• Before marriage or a de facto relationship begins — this is the classic prenup scenario • During a marriage or de facto relationship — sometimes called a postnup • After separation — to formalise financial arrangements as part of separating
Each type is governed by slightly different sections of the Family Law Act, but the core legal requirements are essentially the same.
The legal requirements
For a BFA to be binding, certain requirements must be met under Australian law:
Each partner must receive independent legal advice from their own solicitor before signing. The same lawyer cannot advise both partners. The solicitor must explain the effect of the agreement and its advantages and disadvantages to their client specifically.
Each solicitor must sign a certificate confirming they provided this advice. These certificates are attached to the final agreement.
The agreement must be in writing and signed by both parties.
Both partners should make full and honest financial disclosure. Hiding or understating assets can affect the validity of the agreement.
Both partners must sign voluntarily, free from pressure or duress.
What a BFA cannot do
A BFA deals with property and finances only. It cannot include arrangements about the care, welfare, or living arrangements of children. Those matters are dealt with separately under Australian family law and cannot be predetermined by a financial agreement.
A BFA also cannot prevent a court from making orders in relation to children, regardless of what the agreement says.
Is a BFA the same as a consent order?
No. A consent order is a court-approved arrangement, usually made after separation. A BFA is a private agreement between the parties that does not require court approval.
This distinction matters because a BFA can be set aside by a court in certain circumstances — for example, if there was fraud, duress, or incomplete disclosure. A court order is generally more difficult to overturn.
For most couples creating a pre-relationship financial agreement, a BFA is the appropriate instrument. Your lawyer can advise on which approach is right for your situation.