Are Prenups (Binding Financial Agreements) Right for You in Australia?
What You Need to Know Under the Family Law Amendment Act 2024, which commenced on 10 June 2025, the Family Law Act 1975 now:
- Makes economic and financial abuse a formal consideration in property and maintenance decisions.
- Includes companion animals (pets) as property categories.
- Embeds the duty of full, frank financial disclosure into the Act.
- Clarifies how property settlement outcomes, including financial agreements, should be assessed and enforced.
What Is a Binding Financial Agreement (BFA)?
A Binding Financial Agreement (BFA) often called a “prenup” is a legally enforceable contract made under parts VIIIA or VIIIAB of the Family Law Act. It allows couples to agree on how assets, debts, superannuation, and spousal maintenance are handled, without court intervention.
When Should You Consider a BFA?
- Before marriage or cohabitation, especially if there are significant assets or inheritances.
- During relationships where one party has business interests, substantial debt, or family trusts.
- After separation, to finalise property settlement without litigation.
Legal Criteria for a Valid BFA
- Be in writing and signed by all parties.
- Each party must receive independent legal advice about its effect and pros/cons.
- Parties must share full and frank financial disclosure.
- Include statements from each lawyer attesting to the advice provided.
- Not be fraudulent, unconscionable, or entered under duress.
Advantages and Limitations of BFAs
✅ Benefits:
- Predictability: Assets are split as agreed no court uncertainty.
- Efficiency: Can avoid costly or stressful disputation.
- Flexibility: Can be tailored for complex circumstances—inheritances, businesses,
super, or blended families.
⚠️ Risks:
- Strict legal requirements—otherwise may be void or set aside.
- Changing circumstances: A rigid agreement may not adapt to future life changes.
- Power imbalance: May be unfair if one party is disadvantaged, courts scrutinise
these cases closely.
| Feature | Binding Financial Agreement (Prenup/BFA) | Court-Ordered Property Settlement |
|---|---|---|
| Court intervention | ❌ No — if valid | ✅ Yes |
| Flexibility & customization | ✅ High | ⚖️ Limited by legal standards |
| Risk of being set aside | ✅ Yes, if improper execution | ❌ Lower if court-compliant |
| Legal cost | 💰 Upfront for advice and drafting | 💼 Varies by negotiation or litigation |
| Timing | Before, during, or after relationship | Only after separation or divorce |
How Lawfinity Consultants Can Help
- Detailed guidance on whether a BFA suits your situation.
- Drafting robust, court-tested agreements.
- Assuring compliance with legal requirements: legal advice certificates, disclosure, and sound drafting.
- Explaining when and how a BFA may be set aside or enforced.
- Integrating inheritance planning or business interests.
Ready to Start?
Call us now or book your free consult online.