Binding Financial Agreement (BFA) Cost & Requirements in Sydney: Family Law Act Guide

A Binding Financial Agreement (BFA)—frequently called an Australian “pre-nup” or cohabitation agreement—is a legally binding contract entered into by parties before, during, or after a marriage or de facto relationship. Governed by Part VIIIA (for married couples) and Part VIIIAB (for de facto relationships) of the Family Law Act 1975 (Cth), a valid BFA ousts the jurisdiction of the Family Court to determine property division and spousal maintenance upon relationship breakdown. However, Australian courts subject BFAs to rigorous statutory scrutiny.

Statutory Types of Financial Agreements

Under the Family Law Act, agreements are categorized according to the timing of their execution:

• Section 90B / 90UB: Agreements entered into before marriage or de facto relationship (traditional pre-nuptial agreement).
• Section 90C / 90UC: Agreements entered into during marriage or de facto relationship (post-nuptial agreement).
• Section 90D / 90UD: Agreements entered into after divorce or de facto separation.

Strict Statutory Validity Requirements Under Section 90G

Unlike commercial contracts, a BFA cannot simply be drafted, signed, and witnessed like a deed. Under Section 90G (or 90UJ for de facto couples), an agreement is only binding if and only if:

1. The agreement is signed by both parties;
2. Independent Legal Advice (ILA): Before signing, each party must receive independent legal advice from an independent Australian legal practitioner regarding the effect of the agreement on their rights, and the advantages and disadvantages at that time;
3. Solicitor Statement: Each solicitor must provide a signed certificate confirming that such advice was given; and
4. The statement is exchanged between the parties or their solicitors.

A single lawyer cannot represent or advise both parties. Any perceived conflict of interest invalidates the entire agreement.

Typical Legal Costs for a BFA in Sydney

Because solicitors take on substantial professional negligence liability when advising on BFAs, reputable family law firms in Sydney do not provide “budget” or “rubber stamp” agreements. Average legal fees in Sydney typically reflect:

• Drafting Party: $4,500 to $9,000 + GST (includes full financial disclosure collation, comprehensive asset structuring, drafting bespoke clauses, and negotiation rounds).
• Advising Party (Independent Review): $2,500 to $5,000 + GST (detailed review of disclosure, conference to explain legal consequences, and execution of Section 90G certificate).
• High-Net-Worth / Complex Trust & Commercial Structures: $10,000 to $25,000+ where offshore trusts, corporate shareholdings, and multi-generational wealth are involved.

How BFAs Get Overturned: The Thorne v Kennedy Precedent

Under Section 90K of the Act, the Federal Circuit and Family Court of Australia retains the power to set aside a BFA on specific grounds, including:

• Duress, Undue Influence, or Unconscionable Conduct: Highlighted in the landmark High Court decision Thorne v Kennedy [2017] HCA 49, where a pre-nup presented days before a luxury wedding under an ultimatum was set aside due to inequality of bargaining power and undue pressure.
• Failure of Full and Frank Disclosure: Concealing an asset, business valuation, or superannuation fund is a direct ground for cancellation under s 90K(1)(a).
• Material Change Relating to Children: If children are subsequently born and the agreement creates severe financial hardship for the caring parent (s 90K(1)(d)).