Binding Financial Agreements (BFAs) are a common feature in family law. and found in the Family Law Act 1975 (Cth). Colloquially known as a Prenuptial Agreement (Prenup), BFAs outline where assets are to go in the event that a heterosexual or same-sex couple separate. These Agreements aim to prevent the Family Court from becoming involved in disputes. They are also usually enforced when a couple separates, however the Court can also overturn them. In this article, we’ll explain what Binding Financial Agreements are and when they apply.
Binding Financial Agreements relate to the finances of both parties to a couple. They can cover:
These Agreements can be entered into at any time if the couple is de facto or married. Common circumstances where they are entered into include prior to a marriage or after a separation. BFAs can also be entered into at any other point whilst a couple are de facto or married, or after divorce.
A Binding Financial Agreement will only apply where it is valid. In order to be valid, a BFA needs to:
A BFA can be struck down if:
BFAs indeed have a reputation as a document which can easily be dismissed in the Courts. However if you ensure that you disclose all your finances and your circumstances do not significantly change, it can be enforced.
Binding Financial Agreements (BFA’s) can be a very attractive and flexible tool for parties to give effect to a consent agreement in the event of the breakdown of a marital or de facto relationship. However, there are many factors that come to bear when drafting and negotiating such agreements and it is important to seek legal advice about your rights and entitlements when negotiating and settling a BFA – including appropriate financial disclosure. The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity and does not constitute specific legal advice.
