A Binding Financial Agreement (BFA) can be a valuable tool for couples to protect their financial assets in the event of separation. However, a BFA is not suitable for everyone. For example, if one party has significantly more assets or income than the other or is at risk of financial disadvantage or hardship.
In this blog, we will outline the definitions, benefits and legal requirements of a strong BFA and how Waller Family Lawyers can help you prepare for all possible scenarios.
What is a Binding Financial Agreement?
A BFA, also known as a prenuptial or a financial agreement, is a legal document that outlines the financial arrangements between parties in the event of separation or divorce
The Family Law Act 1975 states that married couples, de facto couples, and same-sex couples can enter into a BFA. The agreement can cover property division, superannuation, spousal maintenance, and any other financial issues the parties wish to include.
To be legally binding, a BFA must be in writing and signed by all parties after they have obtained independent legal advice. The agreement must also comply with the requirements of the Family Law Act, including the condition that the parties have fully disclosed their financial circumstances.
Why enter into a Financial Agreement?
Many benefits may encourage some couples to enter into a BFA. These can include:
- Asset protection: A BFA can be used to protect the assets of each party, including property, investments, and businesses, in the event of a relationship breakdown.
- Avoid costly legal disputes: Setting out the financial arrangements in advance can help to avoid emotionally and financially-draining legal disputes over property division and financial matters.
- Family wealth preservation: A BFA can ensure your assets are protected and passed down to future generations.
- Tailored to individual needs: A BFA is a highly bespoke document that outlines the unique requirements and circumstances of each party, including the property division, superannuation entitlements, spousal maintenance, and any other financial matters.
- Privacy and confidentiality: during divorce or separation court proceedings, your agreement details are kept private from the public.
As each relationship and situation is unique, it’s best to speak with a professional Family Lawyer to determine if entering into a prenup is best for you and then prepare it correctly for your current and future circumstances.
As Brisbane’s leading Family Law specialists, we can prepare your BFA with due diligence to safeguard your assets and prevent the Family Law Court from getting involved. Why not speak with us today?
Can a Binding Financial Agreement be Overturned?
The Family Law Act outlines the circumstances where a BFA can be overturned:
- The agreement was obtained by fraud, including non-disclosure of assets or financial resources.
- A party signed the agreement under duress, undue influence or unconscionable conduct.
- The agreement is void, voidable or unenforceable under other laws, such as contract law.
- The terms of the agreement are impracticable to deliver or there has been a significant change in circumstances (such as the birth of a child).
- It does not comply with the formal requirements of the Family Law Act, such as the requirement for independent legal advice for each party.
How do I terminate my prenup?
Just like when entering your BFA, both parties must sign a written agreement to terminate it. Once you have both agreed to terminate the prenup, there are typically two more steps to complete:
- Contact your solicitor: If you conversed with your solicitor to prepare your BFA, you should advise them of your decision to terminate it.
- Sign the termination agreement: Your solicitor can draft a termination agreement, which you and your partner must sign after obtaining independent legal advice. This agreement should state that you both agree to terminate the prenup and that it will no longer be legally binding.
Brisbane’s Most Trusted Family Lawyers
It is crucial to ensure your BFA or termination agreement complies with the formal requirements of the Family Law Act to ensure that it is valid and enforceable.
At Waller Family Lawyers, we are experts in all matters of divorce, property division, spousal maintenance and prenups. Our compassionate and devoted team strives to achieve the best value outcome for your situation with transparency and respect.
We offer fixed-fee services and a no-time-limit initial consultation so you don’t feel any unnecessary pressure or additional stress. Gain peace of mind and clarity by booking a consultation today.