If you think a prenup is something young people nervously sign before a wedding, preferably without making eye contact, you’re not alone. But in reality, Australia’s version — the Binding Financial Agreement (BFA) — is far more flexible, hopefully less dramatic and more common than most couples realise.

According to BDN Lawyers partner Matt Fuller, a BFA can be made at almost any point in a relationship: before it begins, while it’s under way, or even after it has ended.

“Think of it as six different types under current legislation, split across married and de facto relationships,” he says. “In each category, you can make an agreement before the relationship has really kicked off, during it or after separation.”

For it to be enforceable, both parties must receive independent legal advice — not just a quick read-through, but proper guidance on finances, risks and future implications. Each person must have their own lawyer, otherwise the agreement risks being overturned or deemed unenforceable should the matter become contested or a disagreement arise.

That legal advice is documented in a certificate attached to the agreement, confirming that both parties understand what they’re signing.

“It allows the lawyer to see the full picture of the asset pool, including things like property from previous relationships, inheritances or, on the other side of the coin, significant debts,” he says.

“Only then can the client make an informed decision about whether the agreement is fair and appropriate.”

While all BFAs are drafted using similar legal mechanisms, their purpose shifts depending on timing. Agreements made at the start of a relationship are largely about future-proofing.

Perhaps most commonly, one partner might be bringing a property into the relationship and wants clarity about how that asset would be treated if things don’t work out.

“In that sense, it’s like an insurance policy,” Matt says. “Either the property is preserved, or you agree in advance how it would be dealt with. The key benefit is removing argument from what is presumably already a stressful time.”

BFAs made during a relationship tend to be more detailed, reflecting the reality of shared lives and shared finances. Joint assets, contributions and legal ownership all need to be examined carefully.

“Some couples agree to an even 50/50 split of everything,” Matt says. “Others want contributions recognised differently. The agreement just needs to reflect what both parties genuinely agree to.”

After separation, BFAs often appeal to people who want to avoid court altogether. These agreements allow couples to privately resolve how property, superannuation and savings will be divided, in line with the Family Law Act, but without litigation.

“It’s about process,” Matt says. “What happens to the house, the super, the cash in the bank — all of that can be resolved without going before a judge.”

Lawyer Matt Fuller says it’s better to talk now than fight later. Photo: BDN Lawyers.

Once properly drafted, a BFA is enforceable. While anything can be challenged, Matt says a well-constructed agreement should hold unless there are serious issues such as undue influence, extreme unfairness, or a failure to properly consider the needs of children.

One of the biggest misconceptions Matt encounters is the idea that there’s a clear threshold for when assets become “at risk” in a relationship.

“There’s no set timeframe,” he says. “There’s no test for when someone might cross over to being entitled to a share of your assets. Relationships involve co-mingling of finances and that can get complicated.”

Despite that, many people avoid BFAs altogether — not because they don’t make sense, but because they’re uncomfortable.

“It’s an awkward conversation,” Matt admits. “It’s like saying, ‘I know everything is great right now, but let’s talk about a time when it might not be’.”

There’s also a widespread belief that things will stay amicable if a relationship ends. While that does happen, Matt says disputes often arise when significant assets are involved.

“People assume they’ll work it out between themselves. Sometimes they do — but more often than not, there’s disagreement.”

Cost is another deterrent, but Matt frames it differently. “Drafting a BFA is an investment,” he says. “In the long run, it’s far cheaper than litigation.”

Crucially, a BFA only works if both parties are on board.

“It’s not something that should ever be forced,” Matt says. For that reason, lawyers are often asked to help clients think through how to raise the idea — positioning it as a tool for transparency and communication, rather than conflict.

Seen that way, a BFA isn’t about planning for failure. It’s about clarity, fairness and taking responsibility for the practical realities of sharing a life — whatever the future holds.

For more information, visit BDN Lawyers.