Understanding Binding Financial Agreements: A Comprehensive Guide for Couples

Velocity Legal

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Key Insights

A Binding Financial Agreement is only useful if it is enforceable. The value of a BFA is certainty. But that certainty depends on careful drafting, proper disclosure and a sound process. Unclear clauses, missing asset information, rushed signing or inadequate advice can all create problems later. The agreement should be built to survive scrutiny, not just record what the parties hope will happen.
Timing can become evidence in a later challenge. Signing a financial agreement shortly before a wedding does not automatically make it invalid, but it can support an argument about pressure, duress or unfair process. Agreements should be raised early, negotiated properly and supported by independent legal advice for both parties. A rushed agreement is often the easiest one to attack.
BFAs are especially important where family wealth, inheritance or second relationships are involved. A financial agreement can help define what remains separate, what becomes joint, and whether entitlements change over time. This is particularly useful for blended families, expected inheritances, family trusts, business interests and assets brought into a second marriage. Informal family loan arrangements are often disputed later; a properly drafted BFA gives the parties a clearer framework from the start.

Contents

Can a Binding Financial Agreement give couples certainty if a relationship ends?

A Binding Financial Agreement, often called a prenup, allows couples to agree in advance how property, assets and liabilities will be dealt with if they separate. Without one, property settlement is determined under the discretionary framework in the Family Law Act, which considers contributions, future needs and what outcome is just and equitable.

In this episode of Explain That by Velocity Legal, Andrew Henshaw is joined by Thomas Jenkins to discuss Binding Financial Agreements, when they are used, how they can protect separate property or family wealth, and why enforceability depends on more than simply having a signed document.

The discussion covers:

what a Binding Financial Agreement is;
how BFAs differ from ordinary property settlement under the Family Law Act;
when an agreement can be entered into, including before, during or after a marriage or de facto relationship;
common structures for joint and separate property;
how BFAs can protect inheritances, family wealth and assets from earlier relationships;
why full financial disclosure matters;
the grounds on which a BFA may be challenged or set aside;
duress, timing pressure and agreements signed shortly before a wedding;
why online templates and DIY agreements can create risk;
the importance of independent legal advice; and
how a well-prepared agreement can reduce the risk of future family law litigation.

A practical discussion for couples, separated parties, blended families and families seeking to protect inheritance, business interests or existing assets before relationship issues arise.

For advice on preparing, reviewing or challenging a Binding Financial Agreement, contact Velocity Legal’s Family Law team.

This podcast in no way constitutes legal advice. It is general in nature and is the opinion of the author only. You should seek legal advice tailored to your individual circumstances before acting on anything related to this podcast.

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