Most people don't think about a Binding Financial Agreement until they're already in the middle of a difficult situation. By then, the conversation is harder, emotions are higher, and options that were once straightforward are now complicated by time pressure and competing interests.
A Binding Financial Agreement — commonly called a BFA — is one of the few legal tools in Victoria's family law system that works best when things are going well. It's a private contract between two people that sets out how property, assets, and finances will be handled if the relationship breaks down. And the earlier it's put in place, the more effective it tends to be.
What Is a Binding Financial Agreement?
A BFA is a legal contract made under the Family Law Act 1975 (Cth). It allows couples — whether married or de facto — to agree in advance on how their financial matters will be resolved if the relationship ends. Unlike consent orders, a BFA does not require court approval. It is a private agreement between the parties, provided it meets the strict legal requirements set out by law.
A BFA is not just for wealthy couples. Anyone who owns property, has superannuation, runs a business, or simply wants clarity about financial expectations can benefit from having one in place.
When Can You Enter into a BFA?
A BFA can be made at three stages of a relationship:
- Before the relationship begins — often called a "pre-nuptial agreement" or "pre-nup," this is entered into before marriage or a de facto relationship commences
- During the relationship — for couples who are already together and want to document their financial arrangements going forward
- After separation — as part of finalising financial matters without going to court
Each type serves a different purpose. The most common is the pre-relationship or early-relationship agreement, where both parties want clarity before combining finances, purchasing property together, or starting a family.
What Can a BFA Cover?
A BFA can address a wide range of financial matters, including:
- Real estate and property — including the family home and investment properties
- Superannuation entitlements
- Business interests and assets
- Savings, investments, and bank accounts
- Spousal maintenance
- Debts and liabilities
- Inheritances and gifts received during the relationship
A BFA cannot override parenting arrangements for children. Child support and parenting matters are dealt with separately under different legislation.
What Makes a BFA Legally Binding?
Not every financial agreement holds up. For a BFA to be enforceable under the Family Law Act, strict requirements must be met:
- Both parties must receive independent legal advice before signing
- Each party's solicitor must sign a certificate confirming that advice was given
- The agreement must be signed voluntarily, without pressure or undue influence
- The agreement must be in writing and signed by both parties
If these requirements are not met, a court can set the agreement aside — even years later. A BFA prepared without proper legal advice doesn't just fail — it can create a false sense of security that leaves someone significantly worse off.
Can a BFA Be Set Aside?
Yes. A court has the power to set aside a BFA in certain circumstances, including:
- If it was signed under duress or undue influence
- If fraudulent or misleading information was provided by either party
- If circumstances have changed significantly since signing — such as the birth of a child
- If one party failed to receive proper independent legal advice
- If the agreement would cause serious hardship to a party or a child
This is why the quality of drafting and legal advice at the time of entering the agreement matters so much.
Is a BFA Right for You?
A BFA is not necessary for every couple. But it is worth considering if:
- You own property or significant assets coming into the relationship
- You have children from a previous relationship
- You own or are building a business
- You expect a significant inheritance
- You or your partner has substantially different financial circumstances
- You simply want clarity — and peace of mind — about where you each stand
The conversation can feel uncomfortable. That is normal. But having it before you need to is almost always easier than having it after something has already gone wrong. If you are unsure where to start, our family law team in Victoria can help you understand your options.
How Phan Campbell & Associates Can Help
At Phan Campbell & Associates Lawyers, we advise clients across Melbourne on Binding Financial Agreements under Victorian and federal family law. Whether you are considering a BFA before marriage, during a de facto relationship, or as part of a separation, we provide clear, practical advice tailored to your circumstances.
We also assist with related matters including property settlements, consent orders, and other family law agreements. If you have questions about protecting your financial position, we are happy to have a conversation before you commit to anything.
Frequently Asked Questions About Binding Financial Agreements
1. Do we both need separate lawyers?
Yes. For a BFA to be legally binding, each party must receive independent legal advice from their own solicitor. One lawyer cannot act for both parties.
2. Can we change a BFA after it's been signed?
Yes. A BFA can be amended or replaced at any time, provided both parties agree and the same legal requirements are followed for the new agreement.
3. Does a BFA cover assets acquired after the agreement is signed?
This depends on how the agreement is drafted. A well-prepared BFA can be structured to address future assets, but it needs to be clearly and specifically worded to do so.
4. What happens if we don't have a BFA and we separate?
Without a BFA, financial matters on separation are resolved either by agreement between the parties, consent orders approved by the court, or — if no agreement is reached — by court proceedings. This process can be lengthy, costly, and unpredictable.
5. How long does it take to put a BFA in place?
The timeline depends on both parties being ready and obtaining legal advice. With cooperation, a BFA can often be finalised within a few weeks. We recommend starting the process well before any major life events — such as marriage, purchasing property together, or starting a business.