What is a financial agreement in family law?

Whether you’re in a relationship or separated, you can make a financial agreement with your partner or former partner.

A financial agreement is a type of legally binding road-map for who-gets-what.

It’s also known as a Binding Financial Agreement (BFA). BFAs can include division of property, spousal maintenance and child support.

Pre-nuptial agreements, post-nuptial agreements and separation agreements are all types of BFAs. Usually, a BFA made after the breakdown of a relationship reflects the property settlement that the parties have negotiated.

When to get legal advice

Australian family law requires you to get independent legal advice before you make a financial agreement. You need to be fully aware of all the effects of entering into a BFA, including any negative consequences.

Ideally, it’s best to get legal advice before you separate if you know that separation is a possibility, or as soon as possible after separation. For details about the division of property, see our information about property settlements.

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How much will it cost?

The cost of a BFA will depend on many things including:

  • Whether there’s any disagreement over property  
  • How quickly any disagreements are resolved
  • Whether it’s necessary for you or us to locate any property
  • The complexity of your financial arrangements (for example, business interests and trusts)
  • Whether you’re able to agree on parenting arrangements

Generally, the more things that you can agree upon, and the more quickly you do so, the lower the likely legal costs.

If there’s disagreement, one party may need to make a Family Court application to determine the property settlement. That may mean that there will be a trial to consider the evidence before a decision is made. This can increase costs. Once we know more about your situation, we can give you a written estimate of our fees.

In our first consultation we’ll find out about your situation and estimate your legal costs.

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How long will it take?

The length of time it takes to make a BFA will depend on the extent to which you and your former partner can agree, and the complexity of your financial situation.

Once there’s agreement, we’ll act promptly to make sure both parties sign it. We know that you’ve been through enough. The sooner you can start your new life, the better. We’ll help you get there.

How to enforce a BFA

BFAs are a type of contract. 

If your former partner breaches the BFA and you can’t get them to fix the problem (for example, by paying money that you have both agreed is owed) you could take legal action for breach of contract. You could use the BFA as evidence of the agreement.

Commencing legal action can be expensive and waiting for a trial can take a long time.

We encourage our BFA clients to consider getting consent orders from the Family Court, especially if there’s a chance that your former partner may breach the BFA down the track.

If one party later breaches the BFA, the other can apply to the Family Court to enforce the BFA.

While this will also require a hearing, it’s a much more streamlined process. It’s usually a quicker and less expensive option.

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Frequently asked questions

Post-nuptial agreements are BFAs that a couple makes during marriage. They’re not as common as pre-nuptial agreements and are often used because the financial position of one or both parties has changed significantly since marrying.

They may also:

  • Protect one partner from debts and other liabilities if the other partner is starting a business
  • Ensure a share of the business for one partner
  • Separate an inheritance or another financial windfall from the assets of the relationship
  • Protect the interests of one partner if they have used separate property to buy the marital home.

If both parties agree and in specific circumstances, a BFA can be terminated. However, it must be done in writing through a Termination Agreement or a new BFA. We can help and guide your through this process.

The Family Court will terminate or set aside BFA consent orders only in limited circumstances. For example:

  • If one party fails to disclose assets or business interests
  • If the needs of a child of the relationship have changed significantly, causing hardship for one of the parties.
  • If one party was forced to enter into the agreement
  • If one or both parties didn’t receive independent legal advice before agreeing

If there are no consent orders, contract law will apply. The parties can agree to terminate the BFA. Failing that, principles of fraud, duress, or mistake may apply.

If you believe there’s an issue with your BFA, you’ll need to speak to a family lawyer as soon as possible.

If your BFA needs to be updated, for example, if spousal maintenance is increased or decreased, a new BFA must be made after termination of the existing BFA.

Both parties must agree. The parties must receive independent legal advice before termination.

What’s next?

Contact us so we can find out more about your situation.

You’ll need to bring in as many documents as possible that reflect your financial situation. Once we’ve reviewed everything, we’ll be able to work out the best solution for you.

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