Binding Financial Agreements

Safeguarding Assets In the Event of Divorce or Separation

Binding Financial Agreements NSW

Relationships, unfortunately, don’t always stand the test of time — a Binding Financial Agreement can defend you and your partner’s assets from much of the expense and emotional heartache associated with separation.

Entered into before, during, or after the dissolution of a marriage or de facto relationship — for many, it’s a powerful legal tool that ensures clarity and reassurance. Yet, it’s a move that shouldn’t be taken lightly.

You may be giving up some of your legal financial entitlements, and it might provoke an atmosphere of distrust or suspicion between you and your partner or spouse.

At Falzon Legal, we will compassionately guide you through the whole process. Advising how a Binding Agreement applies both negatively and advantageously to your particular circumstances — and preparing and filing the necessary documentation if you choose to proceed.

What Are Binding Financial Agreements?

A Binding Financial Agreement (BFA Agreement) is what many people refer to — slightly incorrectly — as a prenuptial Agreement or prenup.

Effectively, it’s a binding contract made between you and your spouse or partner that details how some or all of your investments, cash, property, and debts are allocated in the event of divorce, break-up, or separation.

However, while a prenup is agreed before the formalisation of a marriage or partnership — a Binding Financial Agreement can be arranged:

  • Prior to entering a de facto relationship or marriage
  • While in the relationship
  • During a period of separation but before divorce
  • After the break-up of a relationship or divorce

As long as both you and your partner — who can be of the same sex — agree to the terms, you can enter into a BFA. 

However, it’s crucial to remember that in doing so, you both relinquish your entitlements under the Family Law Act — which usually decides a fair and equitable division of financial instruments and assets at the end of a marriage or relationship.

What Makes a Financial Agreement Under Family Law Binding?

As entering into a BFA can mean giving up some of your legal rights, independent advice from a solicitor — for both you and your spouse or partner — is both seriously beneficial and a statutory legal requirement.

At Falzon Legal, we will patiently and diligently explain to you the full consequences — both negative and positive — of entering into a Binding Financial Agreement.

With years of experience in Family Law, we will suggest the best course of action for your particular circumstances. This includes the alternative consideration of a Financial Consent Order, where suitable.

A BFA is only considered binding if the following criteria are met:

  • Both you and your partner/spouse have received independent legal advice before signing the Agreement — and that a copy of such counsel is attached to the proposed Agreement.
  • Your legal advisor, and your partner’s counsel, have signed to say that legal advice was provided prior to signing the Agreement.
  • You and your partner/spouse are about to begin, are in the middle of, or have dissolved a de facto relationship or partnership.
  • Both you and your partner have received a copy of the legal advice given to the other party.
  • The BFA hasn’t been set aside or dissolved.
  • Incorporates a declaration of separation — unless the BFA is signed after the dissolution of the relationship or divorce.

Call Falzon Legal Today To Discuss the Binding Nature of a Financial Agreement

The Types of Binding Financial Agreement and the Family Law Act

Despite its colloquial name as a prenuptial — you may enter into a BFA at the following stages of your marriage or relationship:

Prior to Marriage or De Facto Relationship Financial Agreement

If you and another person are considering marriage or entering into a same/opposite-sex de facto relationship — you can formulate a Binding Financial Agreement. This states what will happen to the financial assets in the event of breakdown or divorce.

During a De Facto Relationship or Marriage

At any time during your partnership or marriage — as long as both you and your spouse/partner agree — you may sign a BFA. If subsequently, issues cannot be resolved and your relationship fails, and you separate — the allocation of cash, investments, and property is already agreed.

Binding Financial Agreement After Separation or Divorce

If your de facto relationship has ceased, or your marriage has resulted in divorce, you can still enter a BFA. This will determine how the property and investments will be apportioned — together with either party’s maintenance payments — without fighting the issue in Court. Alternatively, some people may find a Financial Consent Order more suitable.

Learn More About the Various Formats of Financially Binding Agreements — Call Us

The Advantages of Binding Financial Agreements in Australia

BFAs aren’t ideal for everyone. Although, in many situations, they do offer comfort, reassurance, and clarity, and can avoid the need for unpleasant and protracted legal action in the future.

Falzon Legal will advise on the benefits — and indeed the downsides — of entering into a Binding Financial Agreement. Ceaselessly acting and counselling considerately in relation to your personal situation — we will honestly lay out the advantages and consequences of a BFA.

While every circumstance is different, typical benefits of a BFA include:

Safeguarding of Assets

You, or your partner, may be entering into a relationship or marriage with significantly greater assets than the other. Alternatively, prospective future funds — such as an inheritance from a close relative — could be considered inappropriate or unfair to share.

As long as both sides concur, the allocation of such monies or property can be resolved cordially in advance of divorce or separation.

Avoidance of Legal Action

Should you divorce or separate, BFAs can prevent unpleasant Court action. Usually time-heavy and expensive, battling your ex through legal channels is not only unpleasant in the short term — but can also lead to years of animosity and bitterness.

Peace of Mind

If you and your significant other make a BFA prior to or during your relationship — it can deliver immense reassurance for both parties. With no confusion or ambiguity about prospective asset distribution in the event of a breakdown — you and your spouse/partner already know the outcome.


As long as both parties concur, you can amend the terms of the Financially Binding Agreement at any time. This versatility permits the Agreement to adapt to changes in the relationship or financial positions.

The Possible Downsides of Binding Financial Agreements

As mentioned, BFAs aren’t appropriate, preferential, or desirable in all situations. Depending on your and your spouse’s/partner’s circumstances, they have the possible disadvantages of:

The Binding Financial Agreement Cost

Hopefully, your marriage or de facto relationship will remain strong throughout the years to come. If so, obtaining a Binding Financial Agreement could mean paying for a contract that is completely redundant.

Furthermore, the requirement for both parties to take legal advice leads to expenses that aren’t a prerequisite of other asset-protecting tools — such as Consent Orders.


There is no requirement for a BFA to be considered fair to both parties.

As long as you and your spouse/partner have taken legal advice and signed the Financial Agreement — the distribution of assets at the end of a relationship can favour one side more than the other.

This is in contrast to settlements determined by the Court, or a Financial Consent Order — both of which have to show impartiality and equality to either side.

Permanency and Uncertainty

A BFA is a product of its time. It only reflects the current financial situation and intentions of both parties — and doesn’t take into account future changes of views or financial circumstances.

And, as an enduring Agreement, it can only be amended if both you and your significant other completely concur. Alternatively, having it set aside by the Court is challenging, unlikely unless in exceptional circumstances, and expensive.

Can a Binding Financial Agreement Be Overturned?

A BFA can only be set aside under strict circumstances — you or your spouse/partner simply having a change of opinion isn’t sufficient.

That’s why, at Falzon Legal, we strenuously yet considerately explain to you the full consequences — both positive and negative — of entering into a Financially Binding Agreement.

The conditions under which the Court may consider setting aside an existing BFA include:

  • Evidence of fraud — for example, one party fails to declare the full extent of their assets.
  • Duress — such as threatening to abandon plans for a wedding unless the other party agrees to a BFA.
  • Defrauding creditors.
  • Void Agreement — the BFA does not meet the statutory requirements.
  • Considerable change in circumstances — making it impossible or impractical to adhere to the Binding Financial Agreement.
  • Superannuation issues relating to unsplittable interest or payment flags.
  • Unconscionable conduct — one party acted recklessly or inappropriately without regard to the other party’s interests.
  • Children — a change in circumstances that means the current BFA would not be in the best interests of any children.

Alternatively, a Binding Financial Agreement may be terminated and declared void if both parties either:

  • Agree to enter another BFA, as long as the new BFA includes a provision stating that the previous Agreement is now terminated, or…
  • Agree to sign a Termination Agreement, and have received and shown evidence of independent legal advice relating to the termination.

Falzon Legal — Guiding You Through Binding Financial Agreements

We genuinely hope that your marriage or partnership is long-lasting, happy, and filled with affection. But, as hard as it may be to contemplate now, there may be a time when your relationship reaches a point where it cannot be reconciled.

In some circumstances, planning today for a Binding Financial Agreement can deliver comfort, security, and cost-effectiveness. Knowing that you will not have to face lengthy and emotive Court battles or be deprived of assets you consider yours alone can mean significant peace of mind.

Yet, complex and permanent — and excluding you from many of the protections of the Family Law Act — BFAs require patient and intense consideration.

At Falzon Legal, we will navigate you honestly, transparently, and professionally through your options. Not just explaining the benefits, but also clearly laying out the potential downsides, implications, and possible more suitable alternatives — such as a Financial Consent Order.

Unremittingly understanding of your needs and emotions — with our supportive approach and face-to-face consultations at our office or your home — you’re assured of receiving the expert counsel you deserve in a complex legal area.

Consider a Binding Financial Agreement knowing all the facts — speak to Falzon Legal today.

Binding Financial Agreements FAQs

What Is a Separation Financial Agreement?

Correctly termed as a Binding Financial Agreement, a BFA outlines how the assets of a married couple — or couple in a de facto relationship — will be allocated should they divorce or separate.

Can I Make My Own Binding Financial Agreement for Separation?

No. It’s a legal requirement that both parties have received legal advice — which must be evidenced — before entering into a BFA. As the law is complex, the documentation requires preparation by a legal professional.

Is a Financial Consent Order the Same as Binding Financial Agreement?

No. A Consent Order is usually prepared after the end of a marriage or relationship and must be shown to be fair to both parties. A BFA can be created before, during, or after a partnership and does not have to demonstrate equality.

Does a Binding Financial Agreement Have Other Names?

While Binding Financial Agreement is the correct legal term, sometimes they’re referred to as:

  • BFAs
  • Prenuptials — or prenups
  • Postnuptials — or postnups
  • Cohabitation Agreements
  • Pre-Divorce Agreements
  • Pre-Separation Agreements

What If I Divorce or Separate Without a Binding Financial Agreement?

If your relationship ends, and assets and funds need to be allocated — generally speaking you have three options.

  • Enter into a Binding Financial Agreement — as a postnup.
  • Allow the Family Court to decide the division of assets.
  • Enter into a Financial Consent Order with your former spouse or partner.

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