Preparing for marriage involves more than planning your big day. It also means understanding how your finances will be managed as you build a life together. A Binding Financial Agreement (BFA) helps set clear expectations and protects both partners from future disputes.
In this article, you’ll learn what constitutes an enforceable binding financial agreement, in accordance with the Family Law Act 1975, and why many couples choose a binding financial agreement to protect assets and reduce future disputes. You’ll also understand how a financial agreement sets clear expectations for managing property, debts, and finances before marriage.
Why You May Need a BFA Before Marriage
A BFA before marriage gives you structure and clarity around your financial arrangements. If you have existing assets, business interests, or expect future inheritance such an agreement allows you to protect those assets. Additionally, it supports open conversations to prevent misunderstandings.
Common reasons couples choose a financial agreement include:
Protecting assets owned before the relationship;
Securing future inheritance or family wealth;
Clarifying financial responsibilities;
Managing property ownership; and
Reduce the risk of any costly legal conflict.
Legal Requirements for a Binding Financial Agreement Sydney
A binding financial agreement must meet several legal requirements.
Both partners must receive independent legal advice before signing;
The agreement must be in writing and include complete financial disclosure; and
Each party must willingly agree to the terms.
In these circumstances the Agreement is enforceable under the Family Law Act 1975 and precludes the Court from deciding otherwise. The only exceptions occur when a party has been coerced or been fraudulent.
What to Include in a Binding Financial Agreement
A clear agreement prevents confusion later. Understanding what to include in a binding financial agreement helps you protect your interests. It is your contractual agreement and there is no necessity for fairness, but each must be fully aware of the agreement that they are making. Each section should be specific and easy to understand.
Some of the key matters that must be included are:
A full list of assets and debts held by each partner;
How existing property will be treated during the marriage;
Terms for managing joint or individual bank accounts;
Rules for handling business interests or investments;
Plans for future inheritances or family property;
Responsibility for current and future debts; and
How assets will be divided if separation occurs.
A financial agreement NSW will be set aside by the Court, if a party has exercised coercion or fraud, so complete honesty is required.
Property, Superannuation, and Debt Arrangements
Property and superannuation are usually the most important parts of a binding financial agreement. You are able to make your own choices and decide together, how you wish to work together regarding your finances during your relationship and what will happen in the unlikely event your relationship ends.
Debt management is just as important. Your agreement can clarify who is responsible for personal loans, credit cards, or business debts. Clear terms prevent conflict and protect both partners from unwanted financial pressure.
Why Professional Guidance Matters
Drafting a binding financial agreement without proper advice can create issues later and result in it being unenforceable. Independent legal advice is mandatory under the legislation and such advice ensures both partners understand the terms and voluntarily agree. To do otherwise such agreement will not meet the requirements under the Family Law Act 1975.
Professional guidance ensures that:
Your agreement is enforceable;
That the agreement is structured correctly;
That you are fully aware of unfair or one-sided clauses;
Update the agreement when circumstances change.
Why Your Financial Agreement Deserves Serious Consideration
A BFA before marriage offers security, clarity, and peace of mind. It helps you protect what matters while supporting open financial communication. By preparing a clear and legally compliant document, you and your partner set a stable foundation for your future.
Jeffrey Choy
JCL Legal
0419 233 670
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Liability limited by a scheme approved under Professional Standards Legislation
Legal Disclaimer: This guide is for informational purposes only and does not constitute legal advice.
