Do You Need Clarity About Assets, Financial Risk or Future Arrangements?
A Binding Financial Agreement can provide greater certainty around property, liabilities, superannuation and other financial interests if a relationship later ends.
Whether it is suitable, and whether it will be given effect, depends on the facts, disclosure, independent advice, timing and how the agreement is prepared.
Each party must obtain independent legal advice. Octagon can act for one party only.
A BFA can be set aside in defined circumstances. Proper preparation reduces that risk. It does not eliminate it.
Agreed pricing may be available where the proposed work can be defined before it begins.
What a BFA may deal with
- Real property — a home, investment property or other land
- Business interests, including control, value, goodwill and related entities
- Shares and other investment holdings
- Interests in trusts or other ownership structures, where those interests can be identified
- Liabilities, including borrowings, guarantees and other financial obligations
- Savings and investment accounts
- Superannuation interests, where the agreement is drafted to do so
- Inheritances, gifts and other future interests
- Other financial resources
- How property, liabilities and financial resources are to be treated if the relationship ends
Questions people actually ask
What is a Binding Financial Agreement?
A Binding Financial Agreement is a written agreement made under the Family Law Act about how property, financial resources and, in some cases, maintenance are to be dealt with if a marriage or de facto relationship ends. It is intended to provide greater certainty than leaving those issues to a later court process. It is binding only if the statutory requirements are met, including independent legal advice for each party.
When can a BFA be made?
A BFA can be made before a marriage, during a marriage, after a marriage, or in corresponding de facto circumstances. The available pathway depends on the parties’ relationship status at the time the agreement is made. Timing affects both the legal pathway and the practical risk if the agreement is later examined.
Do both parties need separate lawyers?
Yes. Each party must receive independent legal advice before signing. One lawyer cannot advise both parties. If the other party has not obtained advice, the agreement should not be treated as ready for execution.
Can a BFA deal with property?
Yes, a BFA can record how real property — a home, investment property or other land — is to be treated if the relationship ends. What should be included, and how, depends on ownership, liabilities attached to the property, and the parties’ objectives. It does not automatically cover every property interest in every case.
Can a BFA deal with a business?
A BFA can record how business interests are to be treated if the relationship ends. It cannot by itself prevent every later claim, and it does not replace company, partnership or trust documents. Business owners should consider the BFA together with the actual ownership structure.
Can a BFA deal with superannuation?
It can, if it is drafted to do so and the superannuation interest is properly identified. Superannuation is often a substantial part of the financial picture. Whether it should be included, and how, depends on the fund, the interest and the parties’ objectives.
Can a BFA address inheritance or family wealth?
A BFA can address how an inheritance, gift or family provision is to be treated if the relationship ends. Expected inheritances are not always received, and the terms need to be drafted against that uncertainty. Estate-planning documents should be reviewed at the same time where relevant.
Can a BFA be made after marriage?
Yes. A financial agreement can be made during a marriage or after a marriage ends, as well as before marriage. The correct pathway depends on the parties’ status when the agreement is made. Marriage by itself does not make an agreement enforceable if the Family Law Act requirements are not met.
Can de facto couples make a BFA?
Yes. De facto couples can make a financial agreement under the Family Law Act, including before living together, during a de facto relationship, or after it ends. Whether a relationship is a de facto relationship is a factual question. That should be assessed before the agreement is framed.
Can a BFA be set aside?
Yes. A BFA can be set aside in circumstances set out in the Family Law Act, including where there was fraud, non-disclosure of a material matter, unconscionable conduct, or a material change relating to the care of a child that would make it unjust to enforce the agreement. Proper preparation reduces that risk. It does not eliminate it.
How long does a BFA take?
A straightforward agreement between parties with a clear asset position and cooperative independent lawyers can often be completed in a matter of weeks. Agreements involving businesses, trusts, superannuation, overseas assets or contested terms take longer. The other party’s readiness is often the constraint. There is no fixed minimum period that makes an agreement safe.
Should a BFA be signed immediately before a wedding?
It is possible, but it is rarely the better course. Signing immediately before a wedding increases the risk that a party later says they did not have a proper opportunity to obtain advice or negotiate. If a ceremony date is close, we will say whether the remaining time is sufficient to do the work properly.