Financial Certainty for Couples: Binding Financial Agreements in Hornsby and the Upper North Shore

• A Binding Financial Agreement (BFA) — now formally just called a “Financial Agreement” — is a private, written contract that sets out how property, assets and debts will be divided if a marriage or de facto relationship ends.
• BFAs are legally recognised and enforceable under Part VIIIA (married couples) and Part VIIIAB (de facto couples) of the Family Law Act 1975 (Cth) — if they are prepared correctly.
• To be binding, each person must get their own independent lawyer, receive advice on the effect and the advantages/disadvantages of signing, and each lawyer must sign a statement confirming that advice was given.
• A BFA can still be set aside by a court in limited situations — for example fraud, non-disclosure, unconscionable conduct, or a material change in a child’s circumstances.
• A BFA can be a genuinely good option for blended families, business or family-trust owners, parents gifting a house deposit, couples with unequal assets, and people entering a second relationship — but it is not right for everyone, and it is not a DIY document.
• This article is general information only and is not legal advice. See the disclaimer at the end.

What Is a Binding Financial Agreement?

A Binding Financial Agreement (BFA) is a written agreement, made under the Family Law Act 1975 (Cth), where a couple decides in advance how their property, superannuation and financial resources will be divided if their relationship breaks down — instead of leaving that decision to a court.

They’re sometimes called “pre-nups,” but that’s only accurate for agreements made before a marriage. A BFA can also be made during a marriage or de facto relationship, or after separation, instead of applying to court for property orders.

Yes — BFAs Are Legally Binding in NSW (If Done Properly)

Because family law is Commonwealth law, the same rules apply whether you live in Hornsby, Wahroonga, Turramurra or anywhere else in NSW. The relevant law is the Family Law Act 1975 (Cth):

• Married couples — Part VIIIA, sections 90B (before marriage), 90C (during marriage) and 90D (after a divorce order).
• De facto couples — Part VIIIAB, sections 90UB, 90UC and 90UD.

Under section 90G (married) and section 90UJ (de facto), a Financial Agreement is only binding if:

Requirement	What it means in practice
In writing and signed	Not a verbal understanding — a formal signed document
Independent legal advice	Each person must see their own solicitor (not the same one), who explains the effect of the agreement and its advantages and disadvantages
Signed advice statement	Each lawyer signs a statement confirming that advice was given, and a copy is provided to the other party or their lawyer
Not terminated or set aside	The agreement hasn’t been overturned by a later agreement or a court order

A useful safety net: under section 90G(1A) / 90UJ(1A), a court has some discretion to still enforce an agreement that has a minor technical defect, if it’s satisfied both people genuinely intended to be bound and it would be unjust not to enforce it. That discretion is not something to rely on — it exists to catch honest mistakes, not to excuse skipping proper legal advice.

(Practical note for de facto couples: if you enter a Financial Agreement as de facto partners and later marry, that agreement stops covering your marriage unless it’s re-made or a new agreement is entered into after the wedding. If you’re planning to marry, this timing needs to be discussed with your solicitor.)

When Can You Enter a Financial Agreement?

Stage	Married couples	De facto couples
Before the relationship/marriage	s 90B	s 90UB
During the relationship/marriage	s 90C	s 90UC
After separation/divorce	s 90D	s 90UD

How a Financial Agreement Is Made — Step by Step

1. Discuss your goals with your partner — what you each want protected and why.
2. Each person instructs their own solicitor. One firm cannot act for both of you.
3. Full and honest financial disclosure — both sides need to know what’s actually being agreed to.
4. Your solicitor drafts (or reviews) the agreement and explains its effect, and the advantages and disadvantages of signing it.
5. Each solicitor signs the required advice statement.
6. Both parties sign the final agreement, and each side is given a copy.

When Is a Binding Financial Agreement a Good Idea?

A BFA isn’t right for every couple, and general information can’t tell you whether it’s right for yours. But these are situations where clients on the Upper North Shore commonly ask us about one:

Situation	Why a BFA is often considered
Blended families	Protecting assets for children from a previous relationship
Family business or trust	Keeping a business, trust or farm outside a future property dispute
Parents gifting a deposit	Ring-fencing a gifted or loaned deposit toward a family home (common across Hornsby, Wahroonga and Turramurra)
Significant premarital assets	One party enters the relationship with substantially more property, savings or an expected inheritance
Second marriage or relationship	Wanting certainty after a previous separation, and protecting children’s future inheritance
Unequal income or assets	Reducing uncertainty and the cost/stress of a contested property settlement later
Protecting one partner from the other’s debts	Keeping pre-existing business or personal debt separate

Reasonable people can disagree about whether a BFA is the right tool in any specific case — some couples prefer the flexibility of leaving property matters to be resolved later by agreement or, if needed, by the court’s discretion under section 79 (married) or section 90SM (de facto). A short consultation is usually the fastest way to work out which approach suits your circumstances.

Can a Binding Financial Agreement Be Overturned?

Yes, in limited circumstances. Under section 90K (married) and section 90UM (de facto), a court may set aside a Financial Agreement if:

1. It was obtained by fraud, including failing to disclose a significant asset or liability.
2. A party entered it to defraud or defeat creditors, or another partner.
3. The agreement is otherwise void, voidable or unenforceable (for example, under ordinary contract principles).
4. Since it was made, circumstances have changed and it’s now impracticable to carry out.
5. A material change in circumstances relating to a child’s care, welfare or development has occurred since signing, and hardship would be caused if the agreement isn’t set aside.
6. A party engaged in unconscionable conduct in connection with making the agreement.

Case example — why timing and pressure matter: In Thorne v Kennedy [2017] HCA 49, the High Court set aside a financial agreement after finding it was affected by undue influence and unconscionable conduct. The agreement was presented shortly before the wedding; the other party made clear the marriage would not go ahead unless it was signed; and the disadvantaged party had limited independent support and was strongly advised by her own solicitor not to sign, but did so regardless. The case is a reminder that a BFA prepared under pressure, at the last minute, is far more vulnerable to challenge than one negotiated with time to reflect and act on independent advice.

Common Mistakes to Avoid

• Leaving it until the last minute — agreements signed days before a wedding are more exposed to challenge (see Thorne v Kennedy above).
• Using a DIY template or one lawyer for both parties — this does not meet the independent advice requirement and is unlikely to be binding.
• Hiding or downplaying assets — non-disclosure is a specific ground to set an agreement aside.
• Assuming a BFA is “set and forget” — a significant change in circumstances (especially involving children) can still affect its enforceability.
• Signing under pressure — if you feel rushed or pressured, say so to your solicitor before signing, not after.

What to Bring to Your First Consultation

• Details of assets, liabilities and superannuation for both parties (as far as known)
• Any existing wills, trust deeds or business structures relevant to the relationship
• Details of any prior agreements (if this is a variation or replacement)
• A general summary of what you’re hoping to achieve

Frequently Asked Questions

Is a Binding Financial Agreement the same as a pre-nup? A “pre-nup” usually refers to a BFA made before marriage (s 90B). BFAs can also be made during a relationship or after separation — the “pre-nup” label only covers one type.

Do both people need their own lawyer? Yes. Independent legal advice for each person is a legal requirement for the agreement to be binding — one firm cannot advise both sides.

Can a Binding Financial Agreement be challenged later? Yes, in limited circumstances set out in section 90K/90UM of the Family Law Act 1975, such as fraud, non-disclosure, unconscionable conduct or a material change affecting a child. See the section above.

Does a BFA cover superannuation? Yes, superannuation can be dealt with in a Financial Agreement, subject to specific rules for splitting or flagging super interests.

We’re in a de facto relationship now but plan to marry — do we need a new agreement? Possibly. A Part VIIIAB (de facto) agreement generally stops applying once you marry, so this timing should be discussed with your solicitor before or shortly after the wedding.

How long does it take to put a Financial Agreement in place? This depends on complexity, disclosure, and how quickly both parties obtain advice — but agreements rushed through at the last minute carry more legal risk (see Thorne v Kennedy above), so it’s worth starting the conversation early.

Is a Binding Financial Agreement always the best option? Not necessarily — it depends on your circumstances. You should obtain advice about your specific situation before deciding.

Next Steps

A court date isn’t the only reason to get financial certainty sorted early — many of the Upper North Shore families we speak with want a Financial Agreement in place before a wedding, a large gift toward a property, or a new business venture, precisely so there’s no pressure or last-minute rush.

If you’re considering a Binding Financial Agreement, Caspian Legal can explain your options and what a properly prepared agreement involves.

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We assist clients in Hornsby and surrounding Upper North Shore suburbs including Waitara, Asquith, Wahroonga, Turramurra, Thornleigh, Pennant Hills, Normanhurst and Berowra.