- Info@sultanlegal.com.au
- +61 2 8029 0269
A Binding Financial Agreement (BFA) is a legally binding contract under Australian law that outlines how property, assets, debts, and financial resources will be divided between parties in a marriage or de facto relationship. Under the Family Law Act 1975 (Section 90D), BFAs can be executed at three different stages:
These agreements provide a clear financial blueprint that minimises ambiguities and potential disputes, allowing couples to manage their financial affairs with certainty and autonomy without going to court.
Understanding the investment required for a BFA helps you budget appropriately and ensures you receive proper legal protection. In New South Wales (2025), the typical cost breakdown is:
Several factors influence the final cost of preparing a binding financial agreement:
Understanding the difference between Binding Financial Agreements and Consent Orders helps you choose the right option for your circumstances. Each has distinct advantages and limitations.
| Feature | Binding Financial Agreement | Consent Orders |
|---|---|---|
| Court Approval Required | No | Yes |
| Legal Advice Required | Mandatory for both parties | Recommended but not mandatory |
| Cost | $6,000-$10,000 (both parties) | $2,000-$5,000 (both parties) |
| Privacy | Private agreement | Public court record |
| Can Be Challenged | More easily challenged | Harder to challenge |
| Timing | Before, during, or after relationship | After separation only |
Choose a Binding Financial Agreement if you:
Choose Consent Orders if you:
Under Section 90D of the Family Law Act 1975, a binding financial agreement in Australia can comprehensively address financial matters between parties. Understanding what can be included helps you negotiate comprehensive protection.
Our experienced family lawyers ensure your binding financial agreement meets all legal requirements and protects your interests.
Book Your BFA ConsultationFor a Binding Financial Agreement to be legally enforceable in Australia, it must satisfy four mandatory requirements under the Family Law Act. Failure to meet any requirement renders the entire agreement invalid and unenforceable.
Both parties must willingly enter the agreement without coercion, duress, or undue influence. Evidence of pressure, ultimatums, or compulsion can render the entire agreement invalid.
Courts consider factors including:
Each party must provide complete, honest disclosure of all assets, liabilities, income, and financial resources. Material non-disclosure is grounds for setting aside the agreement.
Disclosure must include:
Each party must receive independent legal advice from a qualified family lawyer about the advantages, disadvantages, rights, and obligations created by the agreement. This advice must be documented in a certificate signed by the lawyer.
Your lawyer must advise you about:
A certificate from each party's independent lawyer must be signed and attached to the BFA before execution. Without these certificates, the BFA is invalid.
The certificate must confirm:
Critical requirement: Both parties need separate, independent lawyers. You cannot share a lawyer or use lawyers from the same firm. Each party must pay for their own legal advice.
There are three types of binding financial agreements depending on when they're signed. Understanding which type applies helps you navigate the legal requirements and strategic considerations.
Signed before the wedding date, prenuptial agreements protect pre-existing assets, inheritances, family businesses, or wealth brought into the marriage.
Particularly beneficial for:
For unmarried couples in de facto relationships who are living together or planning to cohabit.
In NSW, de facto partners gain property rights similar to married couples after 2 years of living together (or sooner if there are children). A cohabitation agreement protects assets before these automatic rights apply.
Suitable for couples who are:
Executed after marriage has commenced or during separation. Can address financial arrangements during an intact marriage or document property division after separation.
Common uses:
Postnuptial agreements can cover distribution of marital property, terms for separation, spousal maintenance, and superannuation splitting, but cannot address child custody or support.
While Binding Financial Agreements are legally enforceable, Australian courts can set aside a BFA under six specific circumstances. Understanding these grounds helps you avoid common pitfalls and prepare agreements that withstand challenges.
Courts will set aside BFAs where one party provided dishonest information, concealed assets, or made materially misleading statements during negotiations or in their financial disclosure.
Where one party was compelled, pressured, threatened, or coerced into signing without voluntary consent.
The landmark Thorne v Kennedy (2017) case established that:
Where the agreement's terms are so heavily weighted in one party's favour that enforcement would be fundamentally unjust or oppressive.
Courts examine:
Where significant unforeseen changes since signing make the agreement impracticable or unjust to enforce.
Examples include:
Where material assets, liabilities, or financial circumstances were not disclosed at signing. Even innocent non-disclosure can invalidate a BFA.
Where mandatory legal requirements weren't satisfied:
The Thorne v Kennedy [2017] HCA 49 High Court decision fundamentally changed how Australian courts assess binding financial agreements. This case is essential reading for anyone considering a prenup.
Mr. Kennedy (age 67) had $18 million in assets. Ms. Thorne (age 36) had minimal assets and had moved from Romania to Australia to marry him.
Just 11 days before their planned wedding, Kennedy presented Thorne with a BFA and stated he would cancel the wedding if she didn't sign.
Although Thorne received independent legal advice warning her the agreement was "entirely one-sided" and offered her "nothing," she signed it 4 days before the wedding under significant emotional pressure.
The High Court set aside the BFA, establishing these critical principles:
Since Thorne v Kennedy, courts apply stricter standards to prenuptial agreements:
Yes, strongly recommended. Many de facto couples incorrectly believe they're not entitled to each other's property, but the law says otherwise.
De facto partners gain automatic property rights after:
Don't risk losing 30-50% of your assets. Our family lawyers ensure your BFA is legally sound and withstands court challenges.
Schedule Your BFA Strategy SessionUnderstanding common pitfalls helps protect your interests and ensures your BFA withstands potential challenges. Many BFAs fail due to preventable errors.
A Binding Financial Agreement in Australia typically remains in effect indefinitely unless specific termination events occur.
If circumstances change significantly, you can update your BFA through:
Important: Any variation or new agreement must satisfy all the same legal requirements as the original BFA, including independent legal advice and certificates from qualified lawyers.
Consider reviewing and potentially updating your BFA when:
Independent legal advice from a qualified family lawyer isn't just recommended for a Binding Financial Agreement — it's a mandatory legal requirement under Section 90G of the Family Law Act. Without it, your BFA is completely invalid and unenforceable.
Your lawyer must provide a signed certificate confirming:
This certificate must be attached to the BFA before you sign it. Without properly executed certificates from both parties' lawyers, the BFA is worthless.
They're the same thing. "Prenup" (prenuptial agreement) is the informal term for a binding financial agreement signed before marriage. In Australia, the legal term is "binding financial agreement under Section 90B of the Family Law Act." Both terms refer to the same legally binding contract that determines property division if the relationship ends.
At least 3-6 months before the wedding is recommended. After the Thorne v Kennedy case, courts scrutinise prenups signed close to weddings (especially within days or weeks). Signing several months in advance demonstrates both parties had adequate time to consider terms, negotiate, obtain legal advice, and make an informed voluntary decision without time pressure or emotional duress.
Yes. You can sign a BFA at three stages: before the relationship (prenup), during the relationship (cohabitation agreement), or after separation (postnup/separation agreement). Post-separation BFAs document property settlement terms you've negotiated without going to court. However, many lawyers recommend consent orders instead of post-separation BFAs because consent orders have stronger enforceability.
Yes, it's a legal requirement. Each party must receive independent legal advice from their own qualified family lawyer. You cannot share a lawyer or use lawyers from the same firm. Each lawyer must provide a signed certificate confirming they advised their client about the agreement's effect, advantages, disadvantages, and whether it's in their client's best interests. Without these certificates from separate lawyers, the BFA is invalid.
Yes. Superannuation (retirement savings including SMSF) can and should be addressed in a BFA. You can specify how super will be divided if you separate, including percentage splits, specific dollar amounts, or agreeing not to split super at all. The agreement can also address how super contributions during the relationship will be treated. This is particularly important for high-income earners or people with substantial super balances.
The prenup (BFA) remains valid unless you included a sunset clause stating it terminates upon having children. However, having children is a "material change in circumstances" that could potentially be grounds to challenge the agreement's enforcement. Many couples choose to update their BFA after having children to reflect their new circumstances. Remember: BFAs can never determine child custody or child support — those are always decided based on the children's best interests at separation.
No. Online templates, DIY kits, and LegalZoom-style services do not create valid BFAs in Australia. The Family Law Act requires each party to receive independent legal advice from a qualified family lawyer and obtain a signed certificate from that lawyer. Without proper legal advice and certificates, the agreement is completely unenforceable. You cannot shortcut this process — attempting to save money with templates means you have no legal protection at all.
Yes, but it becomes progressively harder. Common grounds for challenge include fraud, duress, unconscionable conduct, procedural defects, failure to disclose assets, or material change in circumstances. The Thorne v Kennedy case showed that agreements can be challenged even after several years of marriage. However, courts consider factors like length of marriage, whether terms were followed, financial changes since signing, and whether parties acted consistently with the agreement's terms. Challenges are most successful shortly after signing.
No official statistics exist, but family lawyers estimate 30-50% of challenged BFAs are set aside (overturned) by courts. Common reasons for failure include lack of proper independent legal advice, insufficient financial disclosure, procedural defects, unconscionable terms, or duress/undue influence. The Thorne v Kennedy case significantly increased the rate at which courts set aside BFAs. Properly prepared BFAs with balanced terms, full disclosure, genuine negotiation, and adequate time for consideration have much higher success rates (70%+).
For people with significant assets, business interests, inheritances, or children from previous relationships, yes — the $6,000-$10,000 cost is worthwhile protection. Without a BFA, you risk losing 30-60% of your assets in a family law property settlement (averaging $50,000-$200,000+ in legal fees fighting in court). However, for couples with minimal assets, similar financial positions, and no complicating factors, a BFA may not be cost-effective. Discuss your specific situation with a family lawyer to determine if the investment makes sense.
Binding Financial Agreements are powerful asset protection tools, but they must be professionally prepared to be legally enforceable. One mistake in drafting, disclosure, or legal advice can make your entire agreement worthless. Our experienced Parramatta family lawyers at Sultan Legal ensure your BFA complies with all legal requirements, protects your interests, and stands up to court scrutiny. We provide transparent cost estimates, explain your options (BFA vs consent orders), and guide you through every step of the process.
📅 Book Your BFA Strategy Consultation🡒 Related family law services: