What is a Binding Financial Agreement?
A plain English explanation of what BFAs are, when couples use them, and what makes them legally binding in Australia.
The basics
A Binding Financial Agreement — commonly called a BFA — is a legal agreement that allows couples to set out how their property and finances would be divided if their relationship ends. In Australia, BFAs are governed by the Family Law Act 1975.
When created before marriage or a de facto relationship begins, a BFA is commonly referred to as a prenup. BFAs can also be created during a relationship (often called a postnup) or after separation.
What a BFA can cover
A BFA can address a wide range of financial matters, including:
A BFA cannot include arrangements about the care of children. Those matters are dealt with separately under Australian family law.
Legal requirements
For a BFA to be binding under Australian law, several requirements must be met:
Independent legal advice
Each partner must receive independent legal advice from a separate lawyer before signing. The lawyer must explain the effect of the agreement and its advantages and disadvantages.
Certificates of advice
Each lawyer must provide a signed certificate confirming that independent legal advice was given. These certificates must be attached to the agreement.
Written agreement
The BFA must be in writing and signed by both parties.
Full financial disclosure
Both partners should provide full and honest disclosure of their financial position. Incomplete or misleading disclosure can affect the validity of the agreement.
Voluntary signing
Both partners must sign voluntarily, without undue pressure or duress.
When can a BFA be set aside?
A court can set aside a BFA in certain circumstances, including where:
The agreement was obtained by fraud or duress; one partner did not fully disclose their financial position; the agreement has become impractical to perform; or the agreement would cause significant hardship to a child of the relationship. This is why proper process — including independent legal advice and full disclosure — matters so much.
Prenups vs postnups
A BFA created before marriage or a de facto relationship (a prenup) follows the same legal requirements as one created during the relationship (a postnup). The key difference is timing. Prenuply is designed primarily for couples preparing an agreement before or early in their relationship.
Prenuply guides couples through the BFA process — from financial disclosure to independent legal advice — at a fixed, transparent fee.
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