MATTER PAGES

BINDING FINANCIAL AGREEMENTS

(BFAs)

Binding Financial Agreements (BFAs)

Private financial agreements with enforceability in mind.

A Binding Financial Agreement (BFA) is a private contract under the Family Law Act 1975 that sets out how property, financial resources, and liabilities are to be managed if a relationship ends.

BFAs can be made before, during, or after a relationship. They are used to create clarity, asset protection, and financial certainty.

When BFAs Are Used

Clients commonly seek BFAs in situations such as:

  • Before entering a marriage or de facto relationship

  • After separation to document a financial outcome

  • To protect pre-existing assets or family contributions

  • Where income streams are unequal

  • Where one party owns or controls a business

  • Where trusts or inheritances are involved

BFAs are often used by cooperative parties who want to reduce ambiguity and future risk.

What BFAs Can Cover

Depending on timing and structure, a BFA may address:

  • Property and asset division

  • Liabilities and debt

  • Superannuation

  • Financial resources

  • Spousal maintenance (where applicable)

  • Future financial arrangements

Enforceability depends on structure and drafting, not length.

Legal Requirements & Enforceability

For a BFA to be binding:

  • Each party must receive independent legal advice

  • Lawyers must sign Statements of Independent Advice

  • The agreement must not be vulnerable to being set aside due to:

    • Non-disclosure

    • Duress or undue influence

    • Unconscionable conduct

    • Certain changes relating to children

Template agreements often fail because they lack proper disclosure context and risk analysis.

BFA vs Consent Orders

  • BFAs are private contracts and are not reviewed by the Court

  • Consent Orders are assessed by the Court as “just and equitable”

  • BFAs can address spousal maintenance more flexibly

  • Consent Orders provide greater external oversight

The correct instrument depends on timing, structure, and risk tolerance.

Business Owners & Professionals

We frequently advise on BFAs involving:

  • Companies and directorships

  • Family and discretionary trusts

  • Unequal income streams

  • Professional practices

  • Intergenerational wealth

These matters require careful disclosure and drafting.

Our Approach to BFAs

Our process focuses on:

  1. Understanding the financial landscape

  2. Identifying risk and future vulnerabilities

  3. Drafting commercially realistic terms

  4. Ensuring strict compliance

  5. Coordinating independent legal advice

We draft with the assumption that the agreement may be scrutinised years later.

Frequently Asked Questions

Do both parties need separate lawyers?
Yes. Independent legal advice is mandatory.

Can a BFA be challenged later?
Yes, but proper drafting reduces risk significantly.

Is disclosure required?
While not strictly mandated, lack of disclosure can invalidate an agreement.

Next Step

  • Book a Screening Call (10–15 mins, no fee), or

  • Book a Strategy Session (billed at our standard hourly rate)