Family law
A financial agreement requires more than a template.
Binding financial agreements can address financial arrangements before, during or after a relationship, but strict requirements and individual independent legal advice apply. No lawyer should guarantee that an agreement will never be challenged.
Conflict clearance and written engagement are required before the firm acts.Quick answer
What is a binding financial agreement (BFA) and when is it binding?
A binding financial agreement can set out financial arrangements before, during or after a relationship. To be binding it must meet strict formal requirements, including separate independent legal advice for each party and full disclosure. No lawyer should guarantee that an agreement can never be challenged.
- A BFA can be made before, during or after a relationship.
- Each party must receive their own independent legal advice.
- Full and accurate financial disclosure is required.
- Strict formal requirements reduce — but never remove — the risk of challenge.
- The same lawyer cannot advise both people.
Jurisdiction: Australia (federal family law).
What a BFA should address
- Timing and purpose.
- Full and accurate financial information.
- Property, companies, trusts, debts and superannuation.
- Future changes and review mechanisms.
- Independent advice for each party.
- Drafting, negotiation, execution and document retention.
COMMON QUESTIONS
Frequently asked questions
Is a binding financial agreement guaranteed to hold up?+
No agreement is immune from challenge. Strict formal requirements, independent legal advice for each party and full disclosure all reduce risk, but no lawyer should promise it can never be set aside.
Do both people need their own lawyer?+
Yes. Each party must receive independent legal advice for a binding financial agreement to meet its requirements. The same lawyer cannot advise both.
Can we make one before marriage?+
Agreements can be made before, during or after a relationship. The timing and purpose affect the drafting and the advice each party needs.
What happens if circumstances change?+
A well-drafted agreement can address future change, but significant unforeseen changes can affect enforceability. Reviewing the agreement periodically is sensible.