What Is a Binding Financial Agreement (BFA)?
A Binding Financial Agreement, or BFA, is an official contract made between couples in Australia under sections 90B, 90C, and 90D of the Family Law Act 1975. Think of it as a pre-nup, post-nup, or stay-nup (yep, they're all BFAs here), but specifically designed to set out how assets, money, and property will be divided if things ever go sour.
Here's what makes BFAs powerful: they're legally enforceable contracts that can override the Family Court's usual property division powers under Part VIII of the Act. That means you and your partner get to decide your financial future, not a judge.
You can sign a BFA at three different stages:
- Before marriage (s. 90B) – like a traditional prenup for those contemplating marriage
- During the marriage or de facto relationship (s. 90C) – when circumstances change
- After divorce order is made (s. 90D) – to lock in a settlement after official divorce
The agreement covers everything: real property, personal assets, superannuation, business interests, debts, and even future inheritances if you specify them. It works for both marriages and de facto relationships (including same-sex couples).
Note: De facto couples have their own equivalent sections under Part VIIIAB of the Family Law Act (ss. 90UB, 90UC, 90UD), which operate similarly to ss. 90B, 90C, 90D but with specific requirements for de facto relationships.
By putting everyone's intentions in writing, a BFA offers legal certainty and can help avoid nasty disputes if the relationship tails off. But here's the catch: BFAs have strict legal requirements. Both partners must receive independent legal advice from separate lawyers (who must sign certificates confirming this), and the agreement needs full financial disclosure to be valid.
Section 90K lists specific grounds where a BFA can be set aside: fraud, duress, unconscionable conduct, or failure to disclose significant assets. This is why getting it right from the start matters.
A well-drafted BFA can save tens of thousands in legal fees, months of court battles, and untold stress if the unexpected happens.