How a BFA divides assets — the mechanics

The three building blocks

Most BFAs are built from some combination of three concepts.

1. Separate Property — anything in one party's sole name, plus anything you explicitly quarantine. Stays with that party on separation.
2. Shared Property — anything held jointly, plus anything bought with joint funds. Divided according to the formula the BFA sets out.
3. Personal Effects — clothes, jewellery, family heirlooms, personal records. Each party keeps their own.

Every BFA defines all three, then says how each gets divided if the relationship ends. The interesting choices are in how Shared Property is divided and how broadly Separate Property is quarantined.

Limited vs comprehensive quarantine

This is the first choice. It drives how broad the BFA is.

Limited quarantine — protect specific named assets

A limited quarantine BFA names the specific assets that are protected. Anything not named is dealt with under general law if the relationship ends — meaning it goes back to negotiation or the court.

Limited quarantine is the right answer when you want to protect a specific thing and don't want to lock in the rest of the financial picture. Common examples:

• A particular pre-existing property you owned before the relationship
• An inheritance that's about to arrive
• A business interest you built before meeting your partner
• A parcel of family shares that have been in the family for generations

What the BFA says: “[these specific assets] are the Separate Property of [party]. Everything else gets resolved under general law if we separate.”

Cheaper to draft. Less comprehensive in protection. Often the right choice for couples who want to ring-fence one thing without writing a comprehensive financial constitution.

Comprehensive quarantine — protect everything in each name

A comprehensive quarantine BFA quarantines everything in each party's sole name — present and future — as that party's Separate Property. The other party has no claim against it. Plus a defined regime for how anything held jointly is divided.

Comprehensive quarantine is the right answer when you want a full, forward-looking financial deal. Common examples:

• A pre-marriage BFA where both parties have meaningful assets and want everything ring-fenced
• A during-marriage BFA after a significant life change (inheritance, business sale, property purchase)
• A post-separation BFA where you want to lock in the entire settlement, including future-acquired assets

What the BFA says: “Whatever is in your name is yours. Whatever is in my name is mine. Anything jointly held gets divided like [this]. Anything acquired in future follows the same rule.”

More drafting work. More expensive. More complete protection.

Which is right for you?

The instant-quote tool and the lawyer consultation work this out together. The signal: if you can name the things you want to protect on one hand, limited quarantine usually fits. If you want a clean line drawn around everything, comprehensive is the right call.

How Shared Property gets divided

Once you've decided what's Separate, the BFA needs a rule for what happens to Shared Property if the relationship ends. Four common approaches.

1. Flat percentage split (50/50 or other)

The simplest. All Shared Property gets divided in agreed proportions — most commonly 50/50, but any agreed percentage works.

When it fits: couples who want simplicity, who contribute roughly equally over the relationship, or who explicitly want to treat joint contributions as equal regardless of who put in what.

The trade-off: if one party contributes significantly more to a joint asset, they still only recover the agreed percentage. The BFA treats both parties as equal partners in the joint pool, full stop.

2. Direct financial contributions — dollar for dollar

A direct financial contributions clause means each party recovers exactly what they financially put into joint assets — pound for pound, or in this case dollar for dollar. If you contributed 70% of a property's purchase price, you recover 70%.

When it fits: couples with significantly unequal financial contributions to joint assets. Common where one party has a much larger income, owns more pre-existing wealth, or pays a much larger share of joint expenses.

What counts as a direct financial contribution:

• Initial purchase costs — deposits, stamp duty, transfer fees, government charges, legal fees
• Significant capital improvements (typically over $5,000 per item) that demonstrably add to capital value
• Non-routine strata or special levies designated for major capital repair (roof replacement, cladding, concrete cancer) over $5,000
• Principal and interest mortgage repayments toward purchase, acquisition or capital improvements

What doesn't count — these are operating costs, not contributions:

• Utilities (electricity, water, gas, internet)
• Council rates, water rates, land tax, body corporate or strata levies (except special levies for capital repairs)
• Insurance premiums
• General maintenance, minor repairs, routine servicing

The point of the distinction: the BFA reimburses the capital you put in, not the day-to-day cost of living in the property.

Evidence: direct financial contributions must be traceable through bank statements, receipts, mortgage statements or other documentary evidence. Self-prepared schedules and oral assertions don't count. The BFA typically sets out the standard of evidence so that, on separation, the contribution can be calculated cleanly.

3. Sliding scale — split shifts over time

A sliding scale BFA says the division changes over time as the relationship lengthens. The classic structure:

• If separation occurs within the first 2 years → original owner keeps their asset
• 2–5 years → a partial share to the other party
• 5+ years → asset is split more equally

The thresholds and percentages are agreed at drafting. The principle: in a short relationship, the original owner's contribution dominates; in a long relationship, the joint contributions through living the life dilute that.

When it fits: asset-asymmetric couples who recognise that fairness in year one and fairness in year fifteen aren't the same thing.

4. Proportionate to title ownership

Where joint property is held as tenants in common (e.g. 60/40), the BFA can simply say: each party keeps the percentage on title.

When it fits: couples who've already encoded their relative contribution in the title structure and want the BFA to reflect that.

The mechanics of joint property

Once you've picked a division formula, the BFA covers the operational clauses that make it work.

First right of refusal

A first right of refusal clause gives one party the option to buy out the other's share before the property is listed for sale on the open market. The clause specifies how the buyout price is determined (typically by independent valuation) and the timeframe within which the right must be exercised.

If the first party declines, the other gets their chance. If neither can keep it, the property goes to market.

Sealed bid process

A sealed bid alternative: both parties simultaneously submit sealed bids for the joint property. The higher bidder takes the property and pays the other party their bid price for their share. If bids are equal, the property goes to market.

A more competitive mechanism — useful where both parties have a strong attachment to the property and the BFA needs a tiebreaker.

Overpayment recovery clause

If you and your partner pay unequally into a joint mortgage during the relationship, an overpayment recovery clause records that the overpayments are a debt due to the overpaying party, recoverable on separation.

For this to work, the overpaying party must keep documentary evidence — bank statements, transfer records — showing the amount and source of payments. Self-prepared notes don't count. On separation, the overpayment is paid as a first-priority adjustment from the underpaying party's share of the property.

Negative equity clause

A negative equity clause deals with the scenario where, at separation, the property is worth less than the mortgage. Without it, the BFA may be silent on who bears the shortfall. The clause can specify equal sharing, sharing in proportion to ownership, or any other allocation.

Refinance trigger date

A BFA dealing with a joint property cannot leave the joint mortgage running indefinitely after separation. The BFA should specify a trigger date or condition — a fixed date, the youngest child of the relationship turning 18, the end of a fixed mortgage term — by which the joint mortgage must be refinanced and one party released. Without a clear trigger, the arrangement is open-ended and the BFA may be unacceptable to a lender.

Vacancy clause

A vacancy clause specifies that the party who is to vacate the property must do so within a defined window — typically 30 to 60 days after settlement, or after notice is given. Prevents one party staying indefinitely after their financial interest has been bought out.

Joint bank accounts and future accounts

A BFA should specify how joint bank accounts are divided on separation — typically 50/50 or another agreed percentage.

Right of survivorship

Joint bank accounts often have a right of survivorship — if one party dies, the survivor automatically receives the entire balance, regardless of what the will or the BFA says. Couples who don't want this should consider replacing the joint account with a tenants-in-common arrangement, or making the account two-to-sign.

Future joint accounts

If you plan to open joint accounts later, the BFA can include a forward-looking clause: any joint account opened after this date is to be divided equally on separation (or as otherwise agreed). Worth doing so the BFA doesn't have to be re-drafted later.

Joint offset accounts

An offset account linked to a joint mortgage often holds funds that one party has contributed. The BFA can specify that the offset account balance at the time of separation returns to the contributing party. Alternatively, a two-to-sign requirement on the offset account can prevent unilateral withdrawal during the relationship.

Joint tenants vs tenants in common — the structural choice

For any joint property, you pick a holding structure at the time of purchase. The choice matters for both the BFA and your estate plan.

Joint tenancy

• Each owner holds the property together with a right of survivorship.
• If one owner dies, their share passes automatically to the surviving owner — regardless of what the deceased's will says.
• Cannot be left by will.

Tenants in common

• Each owner holds a specified percentage (e.g. 50/50, 60/40, or any split).
• On death, each owner's share forms part of their estate and passes under their will.
• Allows each party to leave their share to whoever they choose.

Which structure for a BFA?

Tenants in common is generally the safer choice when a BFA is in place. It gives each party control over what happens to their share on death, which:

• avoids the joint-tenancy override that can defeat the BFA's intentions
• particularly matters in blended families, where one party has children from a prior relationship and wants their share to go to those children, not to the surviving partner

If you already hold property as joint tenants, you can sever the joint tenancy and convert to tenants in common — this is a separate conveyancing step. Talk to your lawyer about it.

Contributions to the other party's separate property

What happens if you pay toward your partner's mortgage on a property in their sole name? Or buy them a car? Or contribute to renovations on their separately-owned house?

The default position in most BFAs is the “gifts clause”: contributions you make to the other party's Separate Property are deemed gifts and are not recoverable on separation. They don't create any right, title, interest or claim in that Separate Property.

This is the standard default because it protects the integrity of the quarantine — if every contribution to a separately-owned asset created a claim against it, the quarantine wouldn't be a quarantine. The BFA closes off that route explicitly.

If you want a different rule — for example, “any contributions over $X are recoverable” — the BFA needs to be drafted to say so, with a formal loan agreement or a specific clause. The default is gifts; the variation is opt-in.

Money from family — gifts, loans and parental contributions

A common scenario: one party's parents contribute to a property purchase. The BFA can handle this in several ways.

• Disclosed and quarantined. The contribution is disclosed in the asset schedule and the BFA specifies that on separation, those funds are returned to the party whose family provided them.
• Formal loan. If the family member structured it as a loan (with a written loan agreement), the loan is recovered through the family member, not through the BFA.
• Gift. If treated as a gift, it goes into the joint pool — though even then, the BFA can recognise the disproportionate contribution by adjusting the split.

Whichever route, disclose the contribution in the BFA schedules. Undisclosed family money is a common cause of disputes later.

Spousal maintenance — the set-off

Most BFAs include a clause closing off future spousal maintenance claims. The two common formulations:

• Total set-off — neither party can apply for spousal maintenance from the other in the event of separation. The strongest form.
• Nominal clause ($100) — the BFA formally acknowledges spousal maintenance and disposes of it by setting it at a nominal $100. Functionally equivalent to a waiver, more procedurally robust.

The carve-out: if, at the time the BFA takes effect, one party can only support themselves with a government-tested benefit (Centrelink, JobSeeker, equivalent), the waiver may not protect the other party from a later claim. This is statutory and can't be contracted around. Your lawyer can discuss this with you at your consultation.

(Full detail in Spousal maintenance explained.)

What about super?

Superannuation can be addressed in a BFA in three ways.

1. Each keeps their own. Most common where balances are roughly equal or where the parties want to keep super out of the BFA.
2. Percentage split on separation. The BFA includes a section 90MJ superannuation agreement specifying that, on separation, X% of one party's super transfers to the other's fund.
3. Fixed dollar split on separation. Same mechanism, but a specified dollar amount instead of a percentage.

For a pre-separation BFA, percentage is generally preferable because super balances change over time and a fixed dollar may quickly become out of date. For a post-separation BFA where balances are known, either can work.

(Full detail in Super splits explained.)

What if circumstances change? — sunset and review clauses

A BFA isn't necessarily forever. You can build in clauses that expire or trigger review.

Sunset clause — time-based

The BFA expires after a fixed number of years (e.g. five or ten). On expiry, general law applies again — unless you've signed a new BFA in the meantime.

When it fits: couples who want short-term protection (e.g. while a parent's gift is recent and worth protecting) but anticipate equalising over time.

Sunset clause — event-based

The BFA expires on a specific event. Common triggers:

• The non-citizen party obtaining permanent residency or citizenship
• The arrival of a child of the relationship
• A specified date or anniversary

Review clause

A clause requiring the parties to review the BFA every X years. Caution: review clauses only work if you actually do the review. An unread review clause is words on paper. The more practical approach is to commit informally to revisiting the BFA after major life events — having children, significant income changes, new property acquisitions, marriage — and engaging lawyers at that point.

Due diligence and disclosure clauses

A BFA's strength depends on disclosure. Two clauses worth noting.

Due diligence clause

Records that both parties were given the opportunity to exchange full financial disclosure before signing, but elected not to take it up. A protective mechanism: if either party later claims they weren't aware of the other's assets, the clause provides evidence that they had the chance to look and chose not to.

Disclosure schedules

Annexures to the BFA listing each party's assets, liabilities and financial resources at the date of signing. These should be accurate — an inaccurate schedule can be grounds to set aside the agreement. Update the schedules at signing if anything has materially changed during drafting.

(Full detail in Financial disclosure.)

What a BFA cannot do

To close out the picture — the things a BFA cannot cover, no matter how it's drafted.

• Parenting arrangements for children — must be dealt with through a parenting plan or parenting consent orders (not currently offered by Lawcaptain).
• Future child support obligations — handled separately under the Child Support (Assessment) Act 1989 (Cth). A Binding Child Support Agreement (BCSA) is the binding mechanism.
• The contractual exclusion of family provision claims on a deceased estate — family provision legislation cannot be contracted out of. A BFA is evidence the court considers, but it doesn't bar a claim.
• An unfair deal that the court would refuse to approve under consent orders — wait, actually a BFA can do this. That's one of the main reasons to choose a BFA. It just can't bind the kids' arrangements or the estate claims.

Putting it together — example structures

A few patterns to make it concrete.

“Protect the pre-marriage house, share everything we build”

A pre-marriage BFA. Limited quarantine on the house one party owned before the wedding. Everything acquired during the marriage is Shared Property and split 50/50 if the relationship ends. Sunset clause at 15 years (after which the house gets folded into the joint pool).

“Comprehensive ring-fence, with reimbursement of joint contributions”

A during-marriage BFA after one party inherits a significant business. Comprehensive quarantine — everything in each party's sole name is theirs. Joint assets divided by direct financial contributions (each party recovers what they put in). Spousal maintenance set-off. Joint property held as tenants in common.

“Short relationship, sliding scale”

A pre-cohabitation BFA, neither party has children, neither has trusts. Sliding scale for the family home: if separation in years 1–2, original owner keeps the property; years 2–5, 70/30; 5+ years, 50/50. Spousal maintenance set-off. Each retains their own super. Simple, future-flexible.

“Post-separation, deal outside what a court would approve”

A post-separation BFA. The agreed split is materially asymmetric — one party is keeping a much larger share for reasons specific to the relationship that wouldn't survive a court's “just and equitable” review. The BFA documents the agreed division, attaches a due diligence clause confirming disclosure, includes a spousal maintenance set-off, and is signed with full ILA on both sides. Avoids the court entirely.

How we'll actually walk through this with you

When you engage Lawcaptain for a BFA, the consultation with your lawyer covers:

1. What you're trying to protect (the substantive question)
2. Limited vs comprehensive quarantine (the scope choice)
3. The division formula for joint assets (50/50, direct contributions, sliding scale, or a hybrid)
4. The operational clauses for joint property (first right of refusal, sealed bid, overpayment recovery, refinance triggers)
5. Spousal maintenance (set-off, nominal clause, government-benefits carve-out)
6. Super (split now, split on separation, or each keeps own)
7. Sunset and review clauses
8. Estate planning interaction (joint tenants vs tenants in common, will alignment)

You don't need to know the answers to any of this going in. The lawyer takes you through it, explains the trade-offs, and drafts based on the choices you make.