Understanding Binding Financial Agreements: A Comprehensive Guide for Couples

Can a Binding Financial Agreement give couples certainty if a relationship ends? A Binding Financial Agreement, often called a prenup, allows couples to agree in advance how property, assets and liabilities will be dealt with if they separate. Without one, property settlement is determined under the discretionary framework in the Family Law Act, which considers contributions, future needs and what outcome is just and equitable. In this episode of Explain That by Velocity Legal, Andrew Henshaw is joined by Thomas Jenkins to discuss Binding Financial Agreements, when they are used, how they can protect separate property or family wealth, and why enforceability depends on more than simply having a signed document. The discussion covers: what a Binding Financial Agreement is; how BFAs differ from ordinary property settlement under the Family Law Act; when an agreement can be entered into, including before, during or after a marriage or de facto relationship; common structures for joint and separate property; how BFAs can protect inheritances, family wealth and assets from earlier relationships; why full financial disclosure matters; the grounds on which a BFA may be challenged or set aside; duress, timing pressure and agreements signed shortly before a wedding; why online templates and DIY agreements can create risk; the importance of independent legal advice; and how a well-prepared agreement can reduce the risk of future family law litigation. A practical discussion for couples, separated parties, blended families and families seeking to protect inheritance, business interests or existing assets before relationship issues arise. For advice on preparing, reviewing or challenging a Binding Financial Agreement, contact Velocity Legal’s Family Law team.