Binding Financial Agreements

Protect your assets and secure your financial future with prenuptial, postnuptial, and separation agreements in Melbourne

What is a Binding Financial Agreement?

A Binding Financial Agreement (BFA) is a legal contract between partners that sets out how assets, liabilities, and financial resources will be divided if the relationship ends. These agreements can be made before, during, or after a marriage or de facto relationship, providing certainty and protection for both parties.

In Melbourne and throughout Australia, BFAs are governed by the Family Law Act 1975. When properly drafted and executed, these agreements can override the court's usual approach to property settlement, allowing couples to determine their own financial arrangements.

Important: Both parties must obtain independent legal advice before signing a BFA. This is a legal requirement for the agreement to be binding and enforceable.

Types of Financial Agreements

Prenuptial Agreements (Before Marriage)

Made before marriage, these agreements outline how property and financial resources will be divided if the marriage ends. Commonly used to protect pre-existing assets, inheritances, or business interests.

Postnuptial Agreements (During Marriage)

Created during a marriage or de facto relationship, these agreements can address changes in financial circumstances, business ventures, or inheritance planning while the relationship is ongoing.

Separation Agreements (After Separation)

Made after separation but before divorce, these agreements formalize the division of assets and liabilities, avoiding the need for court proceedings and providing immediate certainty.

Cohabitation Agreements (De Facto)

For de facto couples, these agreements serve the same purpose as prenuptial agreements, protecting assets and defining financial arrangements for couples living together.

What Can Be Included in a BFA?

Financial Matters

  • Division of property and assets
  • Allocation of debts and liabilities
  • Superannuation splits
  • Spousal maintenance arrangements
  • Business interests and investments

Specific Provisions

  • Protection of inheritances
  • Treatment of gifts
  • Income and earning arrangements
  • Living expense responsibilities
  • Estate planning considerations

Note: BFAs cannot include arrangements for children, such as custody or child support. These matters must be determined separately based on the children's best interests.

Requirements for a Valid Agreement

For a Binding Financial Agreement to be legally enforceable, strict requirements must be met:

Written Agreement

The agreement must be in writing and signed by both parties

Independent Legal Advice

Each party must receive independent legal advice from different lawyers

Legal Certificates

Lawyers must provide signed certificates confirming advice was given

Full Disclosure

Both parties must provide complete and honest financial disclosure

No Duress or Fraud

Agreement must be entered into freely without pressure or deception

Benefits and Considerations

Benefits

  • Certainty about financial outcomes
  • Protection of pre-relationship assets
  • Avoidance of costly court proceedings
  • Preservation of family wealth
  • Reduced conflict upon separation

Considerations

  • Can be set aside if requirements not met
  • May become unfair over time
  • Cannot cover child-related matters
  • Requires ongoing review
  • Legal costs for both parties

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Cost Considerations

  • Simple Agreement: $2,000 - $4,000 per party
  • Complex Agreement: $5,000 - $10,000+ per party
  • Note: Both parties need separate lawyers

When to Consider a BFA

  • Bringing significant assets to relationship
  • Expecting inheritance or gifts
  • Own business or investments
  • Second marriage with children
  • Significant income disparity