Binding financial agreements in Victoria.

A binding financial agreement, often called a BFA or, before marriage, a pre-nuptial agreement, is a private contract made under the Family Law Act 1975 setting out how property, superannuation and financial resources will be divided if a marriage or de facto relationship ends. Done properly, it removes those questions from a court's discretion entirely, and can also deal with spousal maintenance.

For an agreement to be binding, the law imposes strict formalities under sections 90G and 90UJ: it must be in writing and signed by each party, with signing every page the safer course because signed counterparts alone may not be enough, each party must receive independent legal advice about its effect and about the advantages and disadvantages of signing it, and a signed statement confirming that advice must be provided and exchanged. Agreements have been set aside for falling short of these requirements, often years after signing, when it matters most.

A binding financial agreement can still be overturned on limited grounds under sections 90K and 90UM, such as non-disclosure of a significant asset, fraud, duress, unconscionable conduct, or where a change in circumstances relating to the care of a child would cause hardship if the agreement were enforced. Careful drafting, full disclosure and unrushed timing are the strongest protection against a later challenge.

Getting an agreement signed close to a wedding date, or without giving the other party genuine time to obtain advice, is one of the most common reasons agreements are later successfully challenged. Start the process well in advance if timing matters to you.