What is a Binding Financial Agreement (BFA)?

• A BFA is a private, legally binding contract that outlines how assets, liabilities, and superannuation will be divided if a relationship ends.
• Unlike Court Orders, a BFA does not require a judge’s approval, offering greater privacy and flexibility for both married and de facto couples.

Can BFA’s be made at any stage of a relationship?

Yes: BFAs can be made before (pre-nuptial), during, or after a relationship.

BFA’s beforehand:

• Where entering into a BFA before you live together or get married, the intention is generally to identify and quarantine certain property individually owned prior to the relationship, while allowing for the inclusion of certain terms to deal with any property that might be jointly purchased at a later time.
• In some circumstances, parties wish to enter into a BFA during their relationship to protect certain property from a claim by the other party if they separate. For example, where one party is to receive an inheritance or a compensation or insurance payment.

BFA’s made after separation:

• Have the ability to simply keep your settlement terms confidential as the agreement is not scrutinised by the Court at the time it is made or more often, allows the parties to divide their property in a way that achieves their mutual goals, in terms that may not necessarily be approved by the Court. For example, where the parties hold entitlements in a self-managed superannuation fund, and that fund owns commercial or residential property, or other jointly owned investments.
• Under the finality principle, the Court would require those investments to be sold, or purchased by one party. A BFA can make provision for the parties to hold separate entitlements in the self-managed superannuation fund, and therefore to continue property together.

BFA vs. Consent Orders: Which is right for me?

Consent Orders:

• Are submitted to the Court for a judge to review and to applies its independent approval, if the Court is minded to do so. Consent Orders are often the most secure way to finalise a property settlement after separation, where the Court’s approval of your settlement terms is considered a final division of your property interests following separation.
• A BFA may be challenged in certain circumstances, and the Court has the power to set aside those terms.

Can a BFA be set aside?

While designed to be “watertight,” a BFA can be set aside in limited circumstances, such as:

• Failure to disclose all assets or financial resources.
• One party was pressured or coerced into signing.
• A significant change in circumstances relating to the care of a child.
• The agreement was entered into for the purpose of defrauding a creditor.

Do I need a lawyer for a BFA to be valid?

Yes. For a BFA to be legally enforceable in Australia, both parties must receive independent legal advice from their own solicitor before signing. The agreement must include a signed certificate from each lawyer confirming certain independent advice was provided. Without this, the agreement is likely to be set aside by a Court.

Why choose Catton and Tondelstrand for your BFA?

We specialise in non-adversarial resolutions, focusing on protecting your future without the need for litigation. With 90% of our matters settling out of court, we will ensure your agreement meets the required legal requirements, tailored to your unique financial goals.

At Catton & Tondelstrand, we help clients navigate Binding Financial Agreements with clarity and confidence. If you’re considering a BFA or want to understand whether it’s the right approach for your circumstances, contact our team on 07 5609 4933 or book an appointment online by clicking here.