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Guide to understanding Binding Financial Agreements (BFAs) for couples in Australia

Binding Financial Agreements may seem like unromantic legal hurdles, but they can provide an essential safety net that offers clarity and security for couples about their financial futures.

People often tiptoe around prenuptial agreements, or as we call them in Australia, Binding Financial Agreements (BFAs). They may seem like unromantic legal hurdles, but they can provide an essential safety net that offers clarity and security for couples about their financial futures.

What is a Binding Financial Agreement (BFA)?

A BFA is a legally binding document that allows couples to establish financial arrangements in case of separation or divorce. It enables you to safeguard your individual assets and investments, as well as those acquired during the course of your relationship. By clearly defining how assets are to be divided in the event of a separation, you may avoid costly and lengthy court disputes.

Why Binding Financial Agreements matter

Let’s face it, life is unpredictable, and relationships sometimes take unexpected turns. That’s where BFAs come in. They aren’t just for the wealthy or famous; they’re for everyday Australians who want to protect their hard-earned assets.

A BFA is like a roadmap, outlining how assets, financial resources, and debts would be divided if a relationship ends. Crafting a BFA is a collaborative process guided by a legal advisor or a financial planner, where you outline and agree on the financial matters that are important to both of you.

Binding Financial Agreement legal framework

In Australia, the Family Law Act of 1975 is the rule book for BFAs. It ensures that BFAs are created under fair conditions where both parties are fully aware of their rights and have received independent legal advice. A BFA isn’t about winning or losing, nor is it about you versus the your partner.  It’s about reaching a fair agreement for both parties.

Unlike court-imposed settlements, a BFA allows couples to tailor the agreement to their specific circumstances and needs. It provides the freedom to determine how assets and liabilities will be divided, spousal maintenance arrangements, and other financial matters, all within the framework of Australian family law. This flexibility ensures that the agreement is fair and takes into account the unique circumstances of your relationship, for example, if one partner chooses to leave the workforce to raise children.

Binding Financial Agreements as a tool

BFAs shouldn’t be seen as scary legal documents. They’re actually tools for encouraging clear communication, understanding, and respect in a relationship. They give you the chance to voice your financial expectations, bringing peace of mind, clarity, and security. BFAs help reinforce mutual respect and understanding in a relationship. It’s often a path of self-discovery and a realization of what matters most to you and your partner. Yes, it’s a legal document, but it’s one that’s moulded by your dreams, aspirations, and a shared understanding by both parties.

Seeking professional advice

A financial advisor can kick off the process by helping clients understand the implications of their assets, and liabilities, and how these may be affected by potential future circumstances. We help our clients articulate their financial wishes clearly, and we provide them with all the necessary financial information and advice they need. This information is then conveyed to their legal advisors or our qualified family lawyers, who use it to draft the BFA.

It’s imperative that each party receives independent legal representation to ensure fairness and avoid potential challenges to the validity of the agreement in the future.

Binding Financial Agreements aren’t for everyone

It’s important to note that while BFAs are gaining popularity, they may not be suitable or necessary for every couple. The decision to pursue a BFA should be made after careful consideration of individual circumstances, including financial assets, debts, and relationship dynamics.

As an alternative to safeguarding the future, more Australian couples are turning to “Pronups”. A pronup is a more positive spin on the BFA or prenuptual agreement, where the focus is on keeping couples together. Pronups can strengthen your relationships and set you up for financial success by opening up communication, empowering you to work as a team, setting common goals, and creating a financial framework for you to build on.  What’s best for you really comes down to your individual attitudes and circumstances – a good financial advisor can help you work out what’s most suitable for you as a couple.


BFAs are not just about protecting assets. They’re about starting open, respectful conversations about your financial future. So if it’s been on your mind, consider introducing the idea of a BFA. It might just be the key to a more secure and harmonious future filled with clarity and confidence.

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