A Binding Financial Agreement (BFA) is Australia's equivalent of a prenuptial or postnuptial agreement — a legally recognised contract that allows couples to agree in advance on how their property, superannuation, and financial resources will be divided if their relationship ends. Unlike consent orders made by a court, a BFA is a private agreement between the parties that, if validly made, removes the court's power to make orders about the property and financial matters covered by the agreement.

BFAs are governed by the Family Law Act 1975 (Cth). For married couples, the relevant provisions are found in Part VIIIA (sections 90B to 90KA). Section 90B allows a BFA to be made before marriage (a prenuptial agreement). Section 90C permits a BFA during marriage. Section 90D enables parties to make a BFA after divorce. For de facto couples — including same-sex couples — Part VIIIAB (sections 90UB to 90UN) provides equivalent provisions. Section 90UB covers agreements before a de facto relationship, section 90UC during the relationship, and section 90UD after the relationship has ended. Western Australia has its own regime under the Family Court Act 1997 (WA).

The critical feature that makes a BFA legally binding, rather than merely a private contract, is the independent legal advice requirement in section 90G. Before signing, each party must receive advice from their own separate solicitor — not a shared solicitor — about the effect of the agreement on their rights and whether it is to their advantage to make it. Each solicitor must then provide a signed statement confirming this advice was given. Without compliance with section 90G, the agreement is not legally binding and offers no protection.

A BFA may deal with property (both real property and personal property), financial resources, and superannuation interests under Part VIIIB. It may also include provisions about spousal maintenance, subject to the limitations in section 90E. A BFA does not, and cannot, deal with parenting arrangements for children — those matters remain subject to the court's jurisdiction under Part VII of the Act.

A Binding Financial Agreement is most commonly used as a prenuptial agreement — entered into before marriage under section 90B of the Family Law Act 1975 — to protect pre-existing assets, inheritances, or business interests that one or both parties wish to preserve separately in the event the marriage ends. This is particularly important where one party has significantly greater wealth, owns a family business, has children from a previous relationship, or anticipates receiving a substantial inheritance.

BFAs are also used during marriage under section 90C, for example when parties receive an inheritance, start a business, or simply wish to clarify their financial arrangements without going to court. A BFA made during marriage can be used to confirm that certain assets acquired during the marriage should remain with one party, or to make a comprehensive financial settlement without involving the Family Court.

After separation, a BFA under section 90D (or section 90UD for de facto couples) provides a faster and more private alternative to obtaining consent orders from the court. It allows parties to reach a negotiated property settlement that is final and binding without the need for court involvement. This is particularly useful where the parties have reached agreement but want a legally enforceable document.

For de facto couples — those in a relationship registered or unregistered, including same-sex couples — a BFA under sections 90UB to 90UD provides the same protection as for married couples. Given that de facto couples in most states acquire property division rights under the Family Law Act after two years of cohabitation, or earlier if they have a child together, many de facto couples use BFAs to manage their financial relationship from the outset.

A BFA is also appropriate where one party owns a business and wants to protect the business and its goodwill from being divided as relationship property. Business owners, professionals with significant practices, and family company shareholders commonly use BFAs to ring-fence business interests that would be difficult to value or divide fairly if the relationship ended.

A legally effective Binding Financial Agreement must contain several essential elements. First, the agreement must clearly identify both parties with their full legal names, dates of birth, and residential addresses, and must specify the type of agreement being made — whether under section 90B, 90C, 90D, 90UB, 90UC, or 90UD of the Family Law Act 1975 — and the date on which it is executed.

Full and frank financial disclosure is a cornerstone of a valid BFA. Each party must disclose their assets, liabilities, superannuation interests, and income at the date of the agreement. Non-disclosure of material financial information is one of the grounds on which the court can set aside a BFA under section 90K. The agreement should record each party's approximate net assets and income, and reference any schedules of disclosure that accompany the document.

The property and financial resources clause is the operative heart of the agreement. It must clearly identify the property that belongs solely to each party (either pre-existing property or property acquired during the relationship) and specify how property will be dealt with in the event of separation. This includes real property (with title references if possible), financial accounts, investments, vehicles, and other significant assets. The clause must state the agreed outcome for each category of property upon separation.

If superannuation is addressed, the agreement must comply with Part VIIIB of the Family Law Act and identify the relevant superannuation fund, the member's details, and either the base amount or percentage to be split. Superannuation provisions require specialist advice given the complex regulatory requirements that apply.

The spousal maintenance clause must be drafted carefully in light of section 90E, which renders void any maintenance exclusion that would leave a party unable to support themselves without a government pension. The agreement should acknowledge this statutory limitation.

The solicitor certificates required by section 90G are non-negotiable. Each party's solicitor must sign a statement confirming that they advised their client about the effect of the agreement on the client's rights and whether it was to the client's advantage to make the agreement. A copy of each certificate must be given to the other party. Without compliant certificates, the agreement is not binding. The governing law clause, severability clause, and execution formalities (including witnessing) must also be correctly included.