What is a Binding Financial Agreement and When Should I Get One?

A Binding Financial Agreement (BFA) — colloquially known as a “prenup” — is a legal contract made between two people in a relationship that sets out how assets and financial resources will be dealt with if the relationship breaks down or one party dies.

Why Are BFAs Particularly Important for Blended Families?

When someone enters a second marriage or long-term de facto relationship, they typically bring with them a significantly larger asset base than they did in their 20s. This may include:

• A family home or investment properties
• Superannuation
• Business interests
• Inheritances
• Cash savings

Without a BFA, all of these assets could become part of the “property pool” in a relationship breakdown, potentially meaning your new partner is entitled to a significant share of assets you intended to preserve for your children from a prior relationship.

A BFA allows both parties to clearly document and quarantine their pre-existing assets, so they remain protected throughout the new relationship.

When Can You Make a BFA?

BFAs can be made at three different stages:

1. Before the relationship begins — the classic “prenup” scenario, entered into before cohabitation or marriage
2. During the relationship — a “postnup” that documents the financial arrangement while the relationship is ongoing
3. After the relationship ends — used to finalise financial arrangements following separation, as an alternative to court proceedings

What Must a Valid BFA Include?

For a BFA to be legally binding in Queensland:

• Both parties must have received independent legal advice from separate solicitors before signing
• The agreement must be in writing and signed by both parties
• The lawyers who provided advice must attach a certificate confirming the advice was given
• The agreement must not be signed under duress or undue influence

Can a BFA Be Overturned?

Yes. Courts can set aside a BFA in certain circumstances, including if:

• It was signed under duress or fraud
• There was a significant failure to disclose assets
• The agreement would result in hardship to a party due to a change in circumstances (such as becoming the primary carer for children)

This is why thorough, transparent, and carefully drafted agreements, with genuinely independent advice on both sides, are critical.

What Makes a BFA Legally Binding?

For a BFA to hold up in court, all of the following must be satisfied:

• Both parties must receive independent legal advice from separate solicitors before signing
• The agreement must be in writing and signed by both parties
• The lawyers who provided advice must attach a certificate confirming the advice was given and that no duress was present
• Both parties must provide full and frank financial disclosure of their assets, liabilities, and income

If financial disclosure was inadequate — for example, if one party had a property or significant wealth they didn’t declare — the other party can challenge the BFA afterwards. Despite this, most BFAs do stand: Australian courts consider them solid law when properly prepared.

When Can Courts Set Aside a BFA?

Courts will set aside a BFA in specific circumstances:

Related Topics

• Legal Matters: Blended Families & Wills, Radio Episode
• What are the Risks of Sideways Inheritance?
• Does Getting Married Cancel Your Will in QLD?
• Legal Matters Episode 21 — De Facto Rights, BFAs & Auction Disclosure
• De Facto Relationships in Queensland

[!WARNING] Protect Your Assets Before It’s Too Late If you enter a new relationship without a properly drafted BFA, your hard-earned assets, including your home, superannuation, and inheritances, are exposed to family court claims if the relationship breaks down.

Contact our Gold Coast family lawyers today to draft a Binding Financial Agreement and guarantee your financial certainty.