Introduction: What Is a Binding Financial Agreement (BFA)?
In relationships, financial clarity builds trust — and when things change, it provides protection.
A Binding Financial Agreement (BFA), often known as a prenup or postnup, is a legally enforceable contract under the Family Law Act 1975 (Cth). It allows couples in New South Wales (NSW) to decide in advance how assets, debts, superannuation, and property will be divided if their relationship breaks down.
A BFA can also specify ongoing financial support or maintenance arrangements. It helps couples avoid lengthy and stressful court proceedings by establishing fair, agreed-upon financial boundaries.
At Lyon Legal Services, we help clients across NSW — from Tamworth to Inverell — understand, draft, and finalise Binding Financial Agreements tailored to their individual circumstances.
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Why You Might Need a Binding Financial Agreement in NSW
There are several situations where drafting a BFA makes practical and emotional sense:
Before marriage or cohabitation (Prenuptial Agreement)
You may wish to protect assets you’ve built before your relationship, such as a home, savings, or business interests.During marriage or de facto relationship
A BFA can be created at any stage of a relationship to outline financial expectations and prevent misunderstandings.After separation or divorce (Post-separation BFA)
When relationships end, a BFA helps finalise property settlements and financial obligations, offering closure and certainty.Blended families or second marriages
A BFA helps ensure children from previous relationships are provided for and family assets remain secure.
Couples across NSW choose Binding Financial Agreements because they protect individual wealth, reduce conflict, and offer peace of mind that decisions are made in advance — not in a courtroom.
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Legal Requirements for a Valid BFA in NSW
For a Binding Financial Agreement to be enforceable under Part VIIIA or Part VIIIAB of the Family Law Act 1975, strict legal conditions must be met. These include:
Written Agreement
The BFA must be in writing and clearly identify both parties.Independent Legal Advice
Each person must obtain advice from a qualified family lawyer about:The effect of the agreement on their legal rights; and
The advantages and disadvantages of entering into it.
Signed Statements from Lawyers
Each lawyer must provide a signed certificate confirming that the required advice was given.Proper Execution
Both parties must sign the agreement voluntarily, without duress or coercion.Full Financial Disclosure
All assets, liabilities, and financial interests must be honestly disclosed.
Failing to meet any of these legal requirements can render a BFA invalid or unenforceable. That’s why working with an experienced family law solicitor in NSW is crucial.
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Step-by-Step: How to Draft a Binding Financial Agreement in NSW
Drafting a BFA is not simply filling in a template — it’s a strategic legal process designed to protect both parties. Here’s how it typically works:
1. Initial Consultation with a Family Lawyer
Meet with your solicitor to discuss your relationship status, financial situation, and objectives.
This step ensures the BFA reflects your personal needs and complies with Australian family law.
2. Gather Financial Documents
Compile a list of:
Assets (homes, cars, shares, savings)
Liabilities (loans, credit cards)
Superannuation accounts
Business or trust interests
Transparency is essential. Omitting information can later invalidate the agreement.
3. Negotiation Between Partners
Both partners discuss and agree on key terms:
How property will be divided if the relationship ends
Treatment of jointly owned assets
Spousal maintenance or ongoing financial support
What happens to future inheritances or gifts
Many couples involve independent financial advisers at this stage to ensure fairness.
4. Drafting the Agreement
Your family lawyer drafts the document in precise legal language that reflects your negotiated terms and meets all statutory requirements.
5. Independent Legal Review
Each party then consults separate legal counsel to review the draft and receive independent advice. This step cannot be skipped — it’s what makes the agreement “binding” under law.
6. Signing and Certification
Once both parties are satisfied and their lawyers have provided signed statements, the BFA is executed. Copies should be securely stored by both clients and their solicitors.
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Common Mistakes to Avoid When Creating a BFA
Even well-intentioned couples can make errors that later cause disputes. Here are key pitfalls to watch out for:
Using a DIY Template or Online Form
These rarely meet the detailed legal requirements of the Family Law Act.Failing to Disclose Assets or Debts
Concealing property or liabilities can invalidate the agreement.Skipping Independent Legal Advice
Without separate lawyers, the BFA will not be enforceable in court.Unfair or One-Sided Terms
Courts can set aside agreements that are unconscionable or exploitative.Not Updating After Major Life Changes
Marriage, children, or changes in income can affect the fairness of the agreement.
Periodic review keeps it relevant and compliant.
Avoiding these mistakes helps ensure your BFA is legally sound and future-proof.
Benefits of Having a BFA in Place
Creating a Binding Financial Agreement offers multiple benefits:
✅ Certainty and Control — You decide how assets are divided, not a judge.
✅ Conflict Reduction — Clearly defined terms minimise emotional and financial disputes.
✅ Privacy — Settlements remain confidential, outside the public court system.
✅ Financial Protection — Safeguards pre-existing assets, inheritances, and business interests.
✅ Peace of Mind — Couples can move forward confidently, knowing expectations are clear.
For many NSW couples, a well-crafted BFA is both a practical and compassionate choice — helping protect relationships and reduce future tension.
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How a Family Lawyer Can Help
Drafting a BFA may seem straightforward, but it involves complex legal nuances. A qualified family law solicitor ensures:
Your agreement complies with the Family Law Act 1975
Both parties receive valid, independent legal advice
The terms are clear, balanced, and enforceable
All certificates, disclosures, and documentation are correctly prepared
At Lyon Legal Services, we take the time to understand your financial and personal goals.
Our NSW family law team provides clear, compassionate guidance so you can make confident decisions about your future.
Frequently Asked Questions About BFAs in NSW
1. Is a Binding Financial Agreement the same as a prenup?
Yes — a “prenup” is a type of BFA made before marriage. In Australia, the correct legal term under the Family Law Act is Binding Financial Agreement.
2. Can I draft a BFA myself without a lawyer?
No. Both parties must receive independent legal advice from qualified solicitors for the BFA to be legally binding. DIY templates often lead to invalid agreements.
3. What happens if one partner doesn’t disclose all their assets?
Failure to make full disclosure can cause the court to set aside the agreement for fraud, mistake, or unconscionable conduct.
4. Can a BFA be changed or revoked?
Yes — a new written agreement or a termination agreement can replace an old one, provided both parties again obtain independent legal advice.
5. Are de facto couples in NSW eligible for a BFA?
Yes. De facto couples (including same-sex couples) can make a BFA under Part VIIIAB of the Family Law Act 1975, as long as they meet the relationship criteria.
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Example Scenario: How a BFA Works in Practice
Imagine Sarah and Daniel, a de facto couple in regional NSW.
Sarah owns a small business and Daniel has a mortgage on his property. Before moving in together, they decide to create a Binding Financial Agreement outlining that:
Sarah’s business remains solely hers;
Daniel retains his property in the event of separation;
Joint savings will be divided equally.
Their lawyers ensure both parties receive legal advice and sign certificates.
Years later, when they amicably separate, their BFA allows them to settle finances without court intervention — saving time, stress, and thousands in legal costs.
This example demonstrates the practical power of a well-drafted BFA.
Conclusion: Protect Your Financial Future with Confidence
A Binding Financial Agreement (BFA) is more than a legal formality — it’s a proactive step toward fairness, clarity, and security in your relationship. Whether you’re entering a marriage, living together, or finalising a separation, a BFA provides peace of mind for both parties.
At Lyon Legal Services, we help clients across NSW draft, review, and finalise BFAs that comply with Australian family law.
Our team combines local insight with legal expertise to protect what matters most — your financial future.
Ready to Draft Your Binding Financial Agreement?
Lyon Legal Services – Family Lawyers NSW
Serving clients across Tamworth, Inverell, and regional NSW.
Contact us today for professional advice on creating a Binding Financial Agreement that works for you.
Visit lyonlegalservices.com.au | Call us for a confidential consultation.