Prenups/BFAs for Professionals and Executives
Prenups & Binding Financial Agreements for Professionals and Executives
Safeguarding complex wealth, future earnings and career momentum when love and law intersect.
Why this guide matters to you
When you occupy a senior role—or you’re on the rapid ascent toward one—your financial life looks different from that of most couples. Salary packages include bonuses, performance shares and carried interest. You might hold equity in a start-up, sit on a board, or own a family trust. A standard property-settlement template won’t capture any of that nuance.
That’s where a Prenuptial Agreement—called a Binding Financial Agreement (BFA) under the Family Law Act 1975—steps in. Drafted well, a BFA lets you and your partner decide before or during the relationship who keeps what if things unravel. Drafted poorly, it can be torn up by a court, leaving your carefully built asset base at risk.
This page explains the law, the pitfalls and the strategy behind a rock-solid BFA tailored for high-earning professionals and C-suite executives.
What is a Prenup/BFA in Australia?
- A BFA is a private contract made under:
- s 90B – before marriage
- s 90C – during marriage
- s 90D – after separation
- s 90UC / 90UD – the de facto equivalents
- Unlike consent orders, a BFA never needs court approval—but it must satisfy strict formalities:
- Written agreement that clearly identifies the relevant statutory section
- Signed by both parties
- Each party must receive independent legal advice covering:
- effect of the agreement on their rights, and
- advantages and disadvantages
- Lawyers must attach signed certificates confirming that advice
- Miss a step and the document may be unenforceable.
Legal milestones and must-know cases
- Thorne v Kennedy (HCA 2017) – A wealthy property developer’s BFA was set aside for unconscionability and undue influence. Lesson: timing and bargaining power matter as much as legal form.
- Hoult & Hoult (FCAFC 2013) – Independent legal advice was “ineffective” where the solicitor failed to probe obvious imbalance. Lesson: advice must be genuine and comprehensive.
- Parke & Parke (FCAFC 2016) – Detailed disclosure and mutual negotiation saved a high-value BFA despite complexity. Lesson: fairness and transparency bolster enforceability.
- Courts now apply a substance-over-form test. If one party wielded “special disadvantage” or if the agreement offends conscience, it can be voided even years later.
Our Family Lawyers
Our lawyers have vast experience in Family Law. Whether your case involves a 50 million dollar business or a suburban house, a relocation with children to Preston or Paris, or a Divorce Application in Melbourne or Mumbai, rest assured that we know how to deal with it in the best possible way and obtain the best possible result for you.
Why professionals and executives need a bespoke approach
| Risk Area | Why a tailored BFA matters |
|---|---|
|
Equity & options |
Vesting schedules, liquidity events and dilution need future-proof clauses.
|
|
Trust distributions
|
If you control a family trust, income streams could be labelled a “financial resource” and lessen your settlement share. |
|
Bonuses & carried interest |
Unearned or contingent rewards can balloon after separation—often well outside normal property pools. |
|
Reputation & confidentiality
|
Public litigation threatens share price or partnership goodwill; a BFA locks in private dispute resolution.
|
|
Global postings
|
Foreign pensions and RSUs raise jurisdiction issues; tailored choice-of-law clauses avoid forum shopping.
|
Key drafting pillars for high-income couples
- Full financial disclosure- Include valuations of shares, trusts, startups and super.
- Clear asset schedules- Attach balance-sheet style annexures distinguishing: pre-relationship assets, joint acquisitions, and excluded interests.
- Business protection clauses- Restrict transfer of company shares to outsiders on separation, preserving voting control.
- Lifestyle tranches- Allocate specific assets—holiday house, art collection—to avoid friction later.
- Maintenance & spousal support- Cap or waive future claims, but retain review triggers for children or serious illness.
- Sunset or review dates- Set milestones (e.g., fifth wedding anniversary, birth of first child) to revisit terms.
- Confidential ADR pathway- Mandate mediation or arbitration before any court action, preserving reputational capital.
Case study #1 – The tech founder
Profile
You co-founded an AI platform, own 25 % ordinary shares, plus 2 % options vesting over four years. Your fiancée is a hospital consultant.
BFA strategy
You co-founded an AI platform, own 25 % ordinary shares, plus 2 % options vesting over four years. Your fiancée is a hospital consultant.
- List current ordinary shares as separate property retained by you.
- Ring-fence future option tranches via a sliding-scale formula: if marriage ends before vesting date X, the non-founder spouse receives 10 % of gains; after date Y, 25 %.
- Create a buy-out mechanism funded by insurance if you must transfer shares.
- Agree that any dilution from capital raises is borne solely by you.
Outcome
Outcome Two years later the company lists on the ASX. Marriage ends amicably; the BFA’s option formula avoids litigation over a $12 million windfall, and both parties walk away with certainty.
Case study #2 – Dual-executive household
Profile
You co-founded an AI platform, own 25 % ordinary shares, plus 2 % options vesting over four years. Your fiancée is a hospital consultant.
- BFA strategy
- Treat pre-existing super balances as separate; future contributions pooled 50/50.
- Insert holiday clause: either party can live in the home for up to six months post-separation while sourcing new accommodation.
- Cap spousal maintenance at $5,000 per month for 12 months, reviewable if children arrive.
- Provide that private school fees are shared pro-rata to income.
Outcome
After seven years you decide to separate. Because the BFA anticipated children (none were born), the maintenance cap applies. Both partners avoid protracted property valuations.
Building enforceability: practical tips
| Tip | Why it matters |
|---|---|
|
Start early
|
Negotiating months before the wedding limits “eleventh-hour” duress claims. |
|
Use specialist lawyers
|
Commercial solicitors may miss family-law nuances; hire accredited specialists. |
|
Mirror-imaging
|
Provide two signed originals, each party keeps one; poor record-keeping sinks agreements. |
|
Interpreter or plain-English summaries
|
Crucial if one party’s first language isn’t English. |
|
Video conference sign-off
|
Creates evidence you understood every clause.
|
|
Independent valuation letters
|
Courts look favourably on objective asset pricing.
|
When can a court set your BFA aside?
- Duress or undue influence – e.g., threats to cancel the wedding.
- Unconscionable conduct – gross power imbalance, emotional pressure, lack of time.
- Material change involving children – a disabled child born after signing can justify rescission.
- Fraud or non-disclosure – hiding crypto wallets or offshore pensions.
- Impracticability – clauses impossible to perform, such as transferring restricted shares without board approval.
- If you’re the wealth-builder, transparency is your friend. If you’re the partner accepting a carve-out, insist on robust disclosure and advice to avoid future challenges.
Tax, super and trust considerations
- Capital gains tax – Transfers under a BFA don’t automatically qualify for rollover relief; structure timing carefully.
- Division 293 surcharge – Large super contributions can trigger extra tax; align maintenance caps with concessional limits.
- Private company loans – Comply with Div 7A rules to prevent deemed dividends.
- Family trusts – Unearned distributions may still count as your financial resource even if the corpus is excluded.
- Early input from a tax lawyer and forensic accountant can save six-figure sums.
Cross-border executives: jurisdictional traps
- If you or your partner relocate, two tests bite:
- Jurisdiction – Which country’s court will hear a dispute?
- Applicable law – Which rules decide validity?
- Australian BFAs generally survive foreign moves, but enforcement overseas hinges on local public-policy rules. Include:
- A choice-of-law clause selecting Australian law.
- A jurisdiction clause granting the Family Court exclusive forum—or arbitration if both relocate permanently.
- Reciprocal indemnity if a foreign court awards an inconsistent outcome.
Negotiation roadmap for busy professionals
Initial strategy call – Confidential briefing with specialist lawyer.
Asset audit – Collate valuations, vesting schedules, trust deeds.
Term sheet meeting – High-level agreement on carve-outs and support.
Draft exchange – Both lawyers iterate; allow two to three rounds.
Financial advice overlay – Accountant models tax outcomes.
Final sign-off – Execute at least 28 days pre-wedding (ideal), or six months before an IPO or partnership admission.
Secure storage – Digital copies in encrypted vault, originals in separate fire-safe locations.
Get in Touch Today
Embarking on a divorce journey doesn’t have to be overwhelming. With Melbourne Family Lawyers by your side, you’ll have the support and expertise you need to move forward with confidence.
Contact us today for a consultation. Let’s discuss how we can help you.
Phone: +613 9670 9677 | Email: [email protected]
Frequently Asked Questions
Does a BFA automatically expire?
No. Unless it contains a sunset clause, it stays in force until set aside or replaced.
Can we include a clause for future children?
Yes. Many executives provide for incremental adjustments if primary-carer duties impact one partner’s income.
What if my partner refuses to sign?
You can’t compel agreement. Consider a relationship property trust or revised estate plan to protect family wealth instead.
Are post-nups reliable?
Yes, but timing still matters. Signing after a major promotion or liquidity event can invite “pressure” arguments.
Your six-step action checklist
Map your income streams – salary, incentives, dividends, consulting fees.
Identify vulnerable assets – business interests, intellectual property, trusts.
Engage dual-discipline advisers – family lawyer + tax/commercial counsel.
Prepare transparent disclosure packs – honesty is non-negotiable.
Allocate negotiation time in your diary – rushing breeds invalidity.
Review every three to five years – careers and wealth profiles evolve fast.
Locking in certainty, preserving ambition
As a professional or executive, your greatest asset isn’t only your current balance sheet—it’s your future earning capacity. A well-crafted Prenup/BFA is less about mistrust and more about mutual clarity. It frees you both to chase promotions, start ventures or invest aggressively, knowing you’ve already agreed the financial safety net.
Ready to protect your achievements and plan confidently with your partner? Reach out for a confidential strategy session. The best time to secure your future is before uncertainty knocks.