After ten years of marriage and two children John and Kate decided to separate. John had provided the funds to buy their first house and had spent an enormous amount of time improving the family home. He faced a dilemma, he didn’t want to leave the family home but if he stayed he was afraid he and Kate would end up having a major fight. John was afraid fighting would scare the children or that Kate might decide he shouldn’t see the children anymore .

A Binding Financial Agreement (BFA) is a legal agreement that allows parties to a marriage or de facto relationship to decide how their financial matters will be dealt with if their relationship breaks down.

Although often referred to as a “prenuptial agreement” or “prenup”, a Binding Financial Agreement can be entered into:

• before marriage or a de facto relationship;
• during a relationship; or
• after separation.

A BFA can provide certainty and assist couples in managing financial issues by setting out how assets, liabilities, financial resources and other matters will be dealt with in the event of separation.

Why Consider a Binding Financial Agreement?

There are many reasons why a person may consider entering into a Binding Financial Agreement.

Common circumstances include:

Protecting Existing Wealth or Assets

A person who has accumulated significant assets before entering a relationship may wish to clarify how those assets will be treated in the event of separation.

This may include:

• property;
• investments;
• shares;
• businesses;
• trusts; or
• other financial interests.

Protecting a Business or Professional Interests

Business owners and professionals may consider a BFA to help manage the potential impact of relationship breakdown on:

• family businesses;
• companies;
• partnerships;
• professional practices; or
• business succession arrangements.

Protecting Inheritances or Family Wealth

Some people wish to preserve family wealth, anticipated inheritances or assets intended to benefit children from a previous relationship.

Providing Certainty for Blended Families

Where a person has children from a previous relationship, a Binding Financial Agreement may form part of a broader financial planning strategy to provide clarity and certainty.

Addressing Significant Financial Differences

A BFA may be appropriate where there is a significant difference between partners in relation to:

• wealth;
• income;
• debts;
• financial resources; or
• future earning capacity.

Reducing the Risk of Future Disputes

Relationship breakdown can be emotionally and financially challenging.

A carefully prepared Binding Financial Agreement may help reduce uncertainty and avoid disputes about financial arrangements in the future.

Who Else May Consider a Binding Financial Agreement?

A BFA may also be considered by people who:

• have substantial debts;
• are entering a second or subsequent marriage;
• wish to protect particular assets;
• have complex financial arrangements;
• wish to address spousal maintenance obligations; or
• want greater certainty about future financial arrangements.

Are Binding Financial Agreements Automatically Enforceable?

No.

Binding Financial Agreements are technical legal documents and strict requirements must be satisfied for an agreement to be binding.

Both parties must obtain independent legal advice about:

• the effect of the agreement on their rights; and
• the advantages and disadvantages of entering into the agreement.

Because of the significant legal consequences, it is important that a BFA is prepared carefully and reflects the circumstances and intentions of both parties.

Binding Financial Agreement Lawyers Melbourne

At Mathews Family Law & Mediation Specialists, our Accredited Family Law Specialists provide advice about Binding Financial Agreements for couples before, during and after relationships.

We assist clients with:

• preparing Binding Financial Agreements;
• reviewing proposed agreements;
• providing independent legal advice;
• financial arrangements following separation; and
• complex family law financial matters.

Our approach combines specialist family law expertise with practical advice designed to provide clarity and certainty.

Contact Mathews Family Law & Mediation Specialists to discuss whether a Binding Financial Agreement is appropriate for your circumstances.

About Vanessa Mathews — Accredited Family Law Specialist

This page was prepared and reviewed by Vanessa Mathews, Principal of Mathews Family Law & Mediation Specialists. Vanessa is an Accredited Family Law Specialist, Accredited Family Dispute Resolution Practitioner (FDRP) and Mediator who practises exclusively in family law. She assists clients throughout Australia with separation, divorce, parenting disputes, property settlements, financial agreements and other complex family law matters.

Helping families resolve conflict through specialist legal expertise and constructive dispute resolution.

Last reviewed: 24 July 2026

Disclaimer: This page provides general information only and does not constitute legal advice. Every family law matter is different and you should obtain advice tailored to

Many people refer to a Binding Financial Agreement (BFA) as a “prenup” or prenuptial agreement.

In Australia, a prenuptial agreement can be legally binding, but only if it is prepared and entered into in accordance with the requirements of the Family Law Act 1975.

A Binding Financial Agreement is a legal agreement that allows couples to set out how their financial matters will be dealt with if their relationship breaks down.

What Should Couples Discuss Before Entering a Binding Financial Agreement?

A Binding Financial Agreement (BFA) is not only a legal document — it is also an opportunity for couples to have open and practical discussions about their financial expectations and future plans.

Before entering into a Binding Financial Agreement, couples should consider discussing important issues such as:

Employment and Financial Contributions

• Who will work during the relationship?
• Will both partners continue working, or will one partner reduce or leave employment?
• How will income, expenses and financial responsibilities be managed?

Children and Family Responsibilities

• Do you intend to have children?
• Are there children from previous relationships?
• How will caring responsibilities be managed?
• How might future parenting responsibilities affect financial arrangements?

Changes in Circumstances

Relationships can change over time. Couples may wish to consider:

• What happens if one partner is unable to work due to illness, injury or disability?
• What happens if a child has additional needs requiring significant care?
• How might unexpected changes affect financial arrangements?

Future Financial Goals

It may also be helpful to discuss:

• retirement goals;
• ownership of property and other assets;
• financial priorities;
• savings and investment plans; and
• expectations about financial independence.

Why These Conversations Matter

A well-prepared Binding Financial Agreement should reflect the circumstances, intentions and priorities of both parties.

Taking the time to discuss these issues openly can help couples make informed decisions and reduce uncertainty about the future.

At Mathews Family Law & Mediation Specialists, our Accredited Family Law Specialists assist clients with Binding Financial Agreements before, during and after relationships. We provide practical advice to help ensure agreements are properly prepared and tailored to each client’s circumstances.

What Can a Binding Financial Agreement Cover?

A Binding Financial Agreement may deal with matters including:

• how property and financial resources will be divided following separation;
• responsibility for liabilities and debts;
• ownership of assets;
• financial arrangements during the relationship; and
• spousal maintenance arrangements.

The agreement can be entered into:

• before marriage or a de facto relationship;
• during a relationship; or
• after separation.

What Makes a Binding Financial Agreement Legally Binding?

For a Binding Financial Agreement to be valid and enforceable, certain legal requirements must be satisfied.

These include:

• the agreement must be in writing;
• both parties must sign the agreement;
• each party must receive independent legal advice from a qualified lawyer; and
• the required legal formalities must be followed.

The purpose of obtaining independent legal advice is to ensure each person understands the effect of the agreement and the advantages and disadvantages of entering into it.

Can a Binding Financial Agreement Be Cancelled or Set Aside?

Yes.

A Binding Financial Agreement may be terminated by written agreement between the parties.

In some circumstances, a Court may also set aside a Binding Financial Agreement, including where legal requirements have not been met or where other circumstances justify setting aside the agreement.

Because of the potential financial consequences, it is important that a Binding Financial Agreement is carefully prepared and reviewed by an experienced family lawyer.

Binding Financial Agreement Lawyers Melbourne

At Mathews Family Law & Mediation Specialists, our Accredited Family Law Specialists advise clients about Binding Financial Agreements before, during and after relationships.

We assist with:

• preparing Binding Financial Agreements;
• reviewing proposed agreements;
• providing independent legal advice;
• advising about asset protection; and
• resolving complex family law financial matters.

Our specialist family law expertise allows us to provide practical advice tailored to your circumstances.

Contact Mathews Family Law & Mediation Specialists to discuss whether a Binding Financial Agreement is appropriate for you.

About Vanessa Mathews — Accredited Family Law Specialist

This page was prepared and reviewed by Vanessa Mathews, Principal of Mathews Family Law & Mediation Specialists. Vanessa is an Accredited Family Law Specialist, Accredited Family Dispute Resolution Practitioner (FDRP) and Mediator who practises exclusively in family law. She assists clients throughout Australia with separation, divorce, parenting disputes, property settlements, financial agreements and other complex family law matters.

Helping families resolve conflict through specialist legal expertise and constructive dispute resolution.

Last reviewed: 24 July 2026

Disclaimer: This page provides general information only and does not constitute legal advice. Every family law matter is different and you should obtain advice tailored to your circumstances.

Both you and your ex-partner are entitled to live in your home after separation regardless of whose name is on the title. You cannot be forced to leave just because the property is not in your name. The only way you can be forced to leave is if the Court orders it.

If you do have to move out, it will not affect your property entitlement. Your rights continue even if you leave. If you fear violence, you should seek advice immediately.

Sometimes one party may seek a sole occupancy order which requires the other party to leave. This allows the remaining spouse to live in the house until the property is divided. This order will usually only be made in exceptional situations where there is domestic violence, threats are being made or if the house has been adjusted because somebody has a disability.

In addition to the assets and liabilities of the relationship, financial and non-financial contributions, other considerations such as future needs, income earning capacity as well as maintenance concerns will be taken into account when determining a property settlement.

This article is designed to address the tax consequences of certain divorce-related actions, such as spousal maintenance and property division. This area is very complex and nuanced, and while we will provide a broad framework for the tax implications related to divorce, should you need specific information or have questions about your situation, please consult your lawyer or a tax specialist. In fact, we advise that you consult a tax adviser even in straightforward cases, just so you will not experience any unexpected tax consequences.

Maintenance Exemption and Deduction

Maintenance payments are exempt from the receiver’s income tax if the payments are made to a person who is or has been a spouse of the one paying maintenance, to or for the benefit of a child of the payer, or to or for the benefit of a child of the other party to the marriage. This exemption extends to maintenance received by a de-facto spouse, as well. The general rule is that there is no tax assessed on maintenance received.

The exemption will only apply to payments attributable to the maintenance payer – and not in situations where the payer makes the payments to divest himself or herself of an income-producing asset or to divert ordinary income that would otherwise be taxable. Essentially, the exemption will not apply if the payer is not acting improperly.

With regard to deductions, the maintenance payer may not deduct maintenance payments from his salary or wages; spousal maintenance may not be claimed as a tax deduction.

Property Division

The tax that is sure to rear its head in the property division area is the capital gains tax. Capital gains taxes are triggered upon the happening of a capital gain event, which can be a gain or a loss of assets. There are more than 50 events enumerated in the Income Tax Assessment Act (ITAA), and they range from the disposal of a capital gains tax asset to the grant of an option or lease.

Certain assets and transactions are exempt from the capital gains tax, including vehicles (that carry less than 1 ton and hold less than nine passengers), trading stock, and the disposal of a life insurance policy by the original beneficial owner of the policy. The right to payment from a superannuation fund or other approved deposit fund is also excluded from capital gains tax.

Capital gains and losses related to the dissolution of a marriage or de facto relationship are exempt from capital gains tax.

The law also provides for certain roll-over relief for transfers between spouses. For instance, if your former spouse transfers an asset with capital gains tax attributes, the roll-over relief allows you to take it as the transferor had it (with the same capital gains tax attributes). Additionally, if an asset was a personal use asset to the transferor, it will be considered a personal use asset to the transferee as well, and special rules apply to calculating capital gains for these assets.

There are specially carved out rules with regard to dwellings and capital gains taxes. Particularly if the main residence is used for business purposes as well – in this case, a special exemption to capital gains tax will apply.

Superannuation, specifically the splitting of superannuation, carries its own tax implications. For instance, if one surrenders their rights to payment out of this type of fund, the capital gains tax provisions will not apply. Additionally, when dealing with splitting certain tax concessions like roll-over relief can apply. Moreover, certain public sector funds will even have untaxed elements or other schemes not subject to tax.

With the lengthy list of exemptions and complexity of capital gains tax law, sometimes it is necessary to make decisions as to how you and your spouse plan to treat certain capital gains tax assets. For instance, you will have to decide which dwelling will be considered the main residence, or you may choose to nominate multiple dwellings as the main residence. These choices you make will certainly have tax implications and thus should be decided prior to any transfer. Typically parties agree to these choices by signing a statement prior to transferring the property but bear in mind that once a choice has been made, it is binding and cannot be changed or altered later.

Legal costs can also result in tax implications. They are considered in part of a capital gains calculation as incidental costs related to the disposal or acquisition of a capital gains asset. These costs should be considered separately from the asset and should be treated differently. Additionally, money spent on legal or tax advice might be deductible under the ITAA.

Property Orders

The court is given broad discretion with regard to property orders and has the power to alter property interests as it sees fit. However, the court is to consider the implications of capital gains taxes that will arise if a party is forced to dispose of property by order of the court.

Certain exemptions and concessions under capital gain tax law may be available if a property order causes a capital gains tax event to occur. For instance, an order requiring the transfer of property may trigger the marriage breakdown roll-over relief provisions.

As you can imagine the tax implications that can arise through divorce are boundless. The law is very complex; this article is merely intended to give you an idea of the implications and consequences so you may be prepared to address these issues with regard to your specific situation.

If an asset has been purchased post separation using assets of the marriage, then there is a strong basis for claiming that both parties have contributed to the asset.

However, in a situation where one spouse acquires property several years after separation from income generated post separation, then it would be difficult to substantiate a claim.

Where a business asset is sold after separation and the asset was built up during the course of the relationship then it can be possible to claim the proceeds as an asset of the relationship.

If a claim is brought to the Court for determination, it is important to remember that the Court looks at the financial position of the parties at the time of hearing. This can be several years after separation.

The Court will also consider other issues such as future needs, income earning capacity and maintenance concerns when determining a property settlement.

Property divisions are based on the contributions made by each party to the relationship.

In a short relationship, each party will tend to leave the relationship with what they brought to the relationship.

In a long relationship, the ongoing contributions made throughout the relationship are seen to decrease the significance any financial contributions made at the beginning of the relationship by an individual party. The continuing financial and non-financial contributions made by both parties to the relationship tend to erode the ability for any particular asset to continue being owned exclusively by one party or the other.

If your relationship led to you spending time out of the paid workforce and you were contributing to the relationship by caring for children or performing domestic tasks, then you have no need to feel disadvantaged. A property settlement takes into account both financial and non-financial contributions made by each party in the relationship.

The Family Law Act recognises that many relationships operate so that one party takes time out of the paid workforce in order to perform domestic tasks or care for children. These contributions are for the most part considered equal to the financial contributions.

Sometimes both parties continue in the paid workforce, but one party may perform the majority of the domestic tasks. This contribution will also be considered in property settlements.

If you cannot reach an agreement with your former partner then an application for property settlement must be filed. There are ongoing opportunities to settle proceedings before a decision is made by the Court. Where a settlement is not reached then the Court will make a decision as to how the property of the couple should be divided after a hearing. If the property is complex then the Family Court will hear the matter.

Parties are often able to reach an agreement about a property settlement with the help of their lawyers. Where parties reach an agreement they can apply to the Court for Consent Orders which is a relatively simple and inexpensive process. When Consent Orders are made the parties gain the benefit of knowing their agreement is binding and enforceable.