How Binding Financial Agreements Protect Inheritance & Family Wealth
(Adams United Lawyers – Fixed Fee BFA & Prenup Specialists)
Inheritance is one of the most common reasons clients come to us asking about Binding Financial Agreements (BFAs). Whether you are expecting an inheritance, have already received one, or your parents want to ensure family wealth stays protected, a BFA is one of the strongest legal tools available under the Family Law Act 1975 (Cth).
Below we explain how a BFA protects inheritance, why more Australian families are turning to them, and what you need to know before putting one in place.
1. Why Inheritance Is at Risk Without a BFA
Many people assume that because an inheritance is “their asset,” it remains separate.
But under Australian family law, that is not guaranteed.
In a separation or divorce, the court can consider:
- Inheritances already received
- inheritances expected in the future
- family gifts and contributions
- financial support from parents
These may be treated as part of the property pool, depending on timing and circumstances.
Without a BFA, inheritance can be divided between partners — even if it came entirely from your family.
2. A BFA Lets You Ring-Fence Inheritance
A Binding Financial Agreement allows you and your partner to agree in advance that:
- Your inheritance is excluded from the property pool
- Future inheritance remains solely yours
- Family gifts and contributions are quarantined
- Your family wealth is not exposed to a relationship breakdown
This is powerful because the court cannot overturn a valid BFA simply because it disagrees with the terms.
A properly drafted BFA gives you certainty and legal protection that voluntary agreements or verbal promises cannot provide.
3. Parents Often Request BFAs to Protect Family Wealth
It is now extremely common for parents to request their adult children enter into a BFA before:
- Receiving a family inheritance
- Being gifted money for a house deposit
- Buying property with family assistance
- Entering the family business
- Receiving early distributions from a trust
A BFA protects their investment, not just yours.
It reassures parents that what they have built — sometimes over multiple generations — is not put at risk.
4. BFAs Protect Both Past and Future Inheritance
A BFA can protect:
✔ Inheritance already received
For example:
You’ve been gifted $300,000 from your parents toward a property. A BFA can state that this amount remains yours if separation occurs.
✔ Inheritance expected in the future
Many families want future inheritances protected, particularly where:
- There are family trusts
- There is a family farm or business
- A parent plans to leave substantial assets
- Multiple siblings are involved
A BFA can exclude future inheritances entirely from division.
5. Protecting Family Homes Purchased With Parental Help
This is one of the biggest scenarios we see.
Example:
Your parents contribute $150,000 toward your first home with your partner.
Without a BFA:
That contribution can be considered part of the shared property pool.
With a BFA:
The contribution, and any equity linked to it, can remain yours.
This prevents painful and unfair outcomes in the event of separation.
6. BFAs Provide Clarity and Reduce Conflict
One of the most valuable benefits of a BFA is the clarity it provides.
You and your partner agree:
- what is shared
- what is separate
- what happens if you separate
- how inherited assets are treated
Having this in writing avoids confusion or disputes later.
It also prevents expensive litigation — which is exactly why many families insist on a BFA before transferring wealth.
7. Are BFAs Enforceable?
Yes — when drafted correctly, a BFA is legally binding under the Family Law Act provided both partners receive independent legal advice.
At Adams United Lawyers, we:
- Draft BFAs
- Review BFAs
- Provide Independent Legal Advice Certificates
- Finalise all required signing steps
- Document financial disclosure
- Ensure compliance with the strict legal requirements
Our BFAs are drafted with clarity and strong enforceability in mind.
8. When Should You Get a BFA?
You can make a BFA:
- Before a relationship (a prenup)
- During a relationship (post-nup or cohabitation agreement)
- After separation
If inheritance is involved, the best time is before it is received or used within the relationship.
But it is never too late — even mid-relationship BFAs can protect future inheritances.
9. How Adams United Lawyers Can Help
We specialise in:
- Binding Financial Agreements
- Prenups (before marriage)
- Cohabitation agreements
- Separation agreements
- Independent Legal Advice reviews
We work on clear fixed fees, fast turnaround, and offer remote appointments Australia-wide.
If you’re receiving an inheritance — or your parents want the family wealth protected — a BFA is one of the strongest protections available.
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