Yes, a Binding Financial Agreement (BFA) can protect assets in Australia. A BFA is a legally enforceable contract under the Family Law Act 1975 (Cth) that allows couples to determine how their property, assets, and financial resources will be divided in the event of a separation. BFAs are commonly used by married couples, de facto couples (including same-sex couples), and those planning to marry to protect their financial interests.

1. What is a Binding Financial Agreement (BFA)?

A BFA is a private legal agreement that outlines how assets, superannuation, debts, and spousal maintenance will be handled in the event of a breakup.

Under Part VIIIA (for married couples) and Part VIIIAB (for de facto couples) of the Family Law Act 1975, BFAs can be entered into:
✅ Before marriage or cohabitation (commonly called a prenup).
✅ During a relationship (to clarify financial arrangements).
✅ After separation or divorce (to finalize property settlement without court involvement).

2. How Does a BFA Protect Assets?

A properly drafted and legally binding BFA can protect:

🏡 Property & Real Estate – Ensuring assets acquired before or during the relationship are retained by the rightful owner.
💰 Inheritance & Family Wealth – Preventing an ex-partner from claiming family inheritances.
📊 Business Interests – Shielding a business from division in a property settlement.
🚗 Personal Assets – Cars, jewelry, investments, and personal belongings.
📉 Superannuation & Investments – Controlling how superannuation is split or retained.
📜 Debt & Liabilities – Determining how debts will be managed after separation.

💡 Key Benefit: A BFA prevents court intervention, meaning the division of assets is pre-agreed, reducing legal costs and emotional stress in a separation.

3. Requirements for a Legally Binding BFA

For a Binding Financial Agreement to be legally valid, it must meet strict requirements under the Family Law Act 1975:

✅ Both parties must receive independent legal advice from separate lawyers.
✅ The agreement must be in writing and signed by both parties.
✅ It must include a statement from each lawyer confirming legal advice was provided.
✅ The agreement must be voluntary – no coercion, duress, or fraud.
✅ It must be fair and reasonable – the court can set aside a BFA if it is unfair, fraudulent, or made under duress.

🚨 If these requirements are not met, the BFA may be challenged and declared invalid by the court.

4. When Can a BFA Be Set Aside?

Under Section 90K (for married couples) and Section 90UM (for de facto couples) of the Family Law Act, a BFA can be overturned by the court if:

❌ One party was pressured into signing (duress, fraud, or undue influence).
❌ There was failure to disclose all assets (hiding financial information).
❌ The agreement is grossly unfair (leaving one party in significant financial hardship).
❌ Circumstances have changed significantly (e.g., one party becomes seriously ill, unable to work, or has unexpected caregiving responsibilities).

💡 Important: If a BFA is challenged, the court may set it aside and distribute assets based on fairness, rather than what was initially agreed.

5. Can a BFA Prevent a Future Property Settlement Claim?

Yes, if the BFA is properly drafted and legally binding, it can prevent an ex-partner from making a property settlement claim through the court.

However, if the BFA is found to be unfair, incomplete, or not compliant with the law, the other party may still challenge it in court and seek a division of assets.

6. Is a BFA Right for You?

A BFA may be beneficial if:
✔️ You want certainty and control over financial matters in case of separation.
✔️ You have significant assets, business interests, or inheritances to protect.
✔️ You wish to avoid lengthy and expensive court disputes over property settlements.
✔️ You and your partner prefer to privately negotiate financial matters without court involvement.

However, BFAs are not always necessary and should only be signed after independent legal advice.