3rd December, 2025
Understanding the difference between a Binding Financial Agreement (BFA) and a Will is essential in estate planning. Each document serves a different purpose, yet they often interact in important ways. Although both deal with assets, they apply at different stages of life. Because of this, proper planning is crucial.
Choosing the Right Document for Your Situation
A Binding Financial Agreement is a private contract between couples. It outlines how assets will be divided if the relationship ends. These agreements are regulated by the Family Law Act 1975. They can be made before, during, or after a marriage or de facto relationship. Many people use them to create clarity and reduce future disputes.
BFAs usually deal with property, liabilities, financial resources, and spousal maintenance. Both parties must receive independent legal advice before signing. The agreement must also meet strict legal requirements before it becomes binding. Consequently, couples gain control over financial outcomes if separation occurs.
A Will, however, deals with your assets after death. It sets out who receives your assets and appoints an executor. However, because a Will operates after death, it is governed by the Succession Act 2006 (NSW). A valid Will helps prevent conflict and ensures your wishes are respected.
The interaction between a BFA and a Will depends on timing. If a couple is still together when a person dies, the Will usually controls the asset distribution. The BFA does not activate because separation has not occurred. Therefore, estate assets are dealt with under the Will or, if there is none, intestacy rules.
If the couple has separated before one partner dies, the situation changes. The BFA will normally take priority because it has already been triggered. Assets must be divided according to the agreement. Only the remaining assets form part of the estate. Consequently, the Will only applies to what is left after the BFA is honoured.
A BFA can also continue after death. Personal representatives may be required to follow its terms. This ensures that agreed financial obligations, including maintenance, are respected. Because of this, both documents must be considered together when estate planning.
How We Can Help
Good planning is essential. Regular reviews help keep your Will and BFA aligned. Clear instructions reduce stress for families during difficult times. However, poor alignment can create disputes and costly litigation.
Our team at Castrikum Adams Legal help clients across Byron Bay, Suffolk Park, Lennox Head, Ballina, Bangalow, Ocean Shores, Mullumbimby, Brunswick Heads, and the Northern Rivers with any Binding Financial Agreement and Will matter.
If you found this blog helpful, please check out our other blogs on Estate Planning.
The content of this Blog does not constitute legal advice, is not intended to be a substitute for legal advice and should not be relied upon as such. You should seek legal advice or other professional advice in relation to any specific matters you or your organisation may have.