A Binding Financial Agreement (BFA) is a legally recognised private contract between two people that sets out how their assets, debts, and financial responsibilities will be handled if the relationship breaks down.
In simple terms: it’s a way for couples married or de facto, to decide their own property outcomes instead of letting the Family Court decide for them.
Key points:
“You have a choice,” explains Ian Macleod from RP Emery & Associates. “You can go through the court system, which is long, painful, and costly or you can make a private agreement between yourselves known as a binding financial agreement.”
A BFA outlines who gets what and how in the event of a separation. It may also determine how property transfers occur without triggering expensive costs such as stamp duty.
Example scenario:
“Banks also prefer to see a BFA or court order,” says Macleod, “because it finalises the financial relationship between parties and ensures no one comes back for a second bite of the cherry.”
For a BFA to be binding and enforceable, each party must receive independent legal advice from separate lawyers. This avoids conflicts of interest and ensures fairness.
Each lawyer provides a certificate confirming they’ve explained:
“Once you sign a BFA,” says Macleod, “you essentially close the door to the Family Court. That’s why it’s critical both parties understand what they’re agreeing to.”
BFAs aren’t just for the rich, they’re for anyone who wants financial clarity and security in a relationship.
You might consider one if:
“It’s for anybody who feels insecure,” says Macleod. “If you’re worried about what might happen after two years in a de facto relationship, a BFA simply closes that door to the court system.”
He compares a BFA to an insurance policy:
“There’s a 40% chance of a first marriage ending within 10 years, far higher than your house burning down. Yet everyone insures their home, and few insure their relationship.”
The terms are often used interchangeably.
Both are enforceable as long as they meet legal requirements — independent legal advice, voluntary consent (no duress), and proper execution.
As Macleod notes, “You can’t include parenting arrangements in a BFA. If you haven’t had children yet, you can’t identify them, and family law doesn’t allow that.”
Typical costs vary, but RP Emery’s streamlined model offers fixed-fee value:
Service OptionApprox. Cost (AUD)IncludesStandard BFA Kit + Legal Review~$3,500Drafting kit, review, and two independent lawyers’ adviceTraditional Law Firm Approach$6,000–$10,000+Custom drafting and individual legal fees
“Our process smooths the path,” says Macleod. “You draft the document, we prepare it for the lawyers, and they provide advice for each party, all at a fixed cost.”
Don’t leave it until just before a wedding or property settlement. Courts can invalidate agreements made under pressure.
Ensure your agreement follows the Family Law Act 1975 framework.
Both parties must have separate lawyers who sign off on the agreement.
If one party feels coerced (“sign this or the wedding’s off”), the BFA could be set aside.
“Give yourselves plenty of time,” advises Macleod. “Agreements made just days before a wedding have been overturned because one party didn’t have a genuine choice.”
If a BFA is rushed, unfair, or signed under duress, it can be invalidated by the court.
Common reasons include:
A properly drafted BFA, however, acts as a solid foundation for financial certainty, much like strong foundations for a house.
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