Binding Financial Agreements (BFA) are written agreements that set out how your assets will be divided in the event of separation. It covers both de facto relationships and marriages. They are often referred to as prenuptial agreements.
When should I consider a Binding Financial Agreement?
A BFA can be entered into before, during or after a de-facto relationship or marriage. They may cover:
- Division of property, finances, and debts;
- Spousal maintenance;
- Adult child maintenance; and other issues.
What are the benefits of a Binding Financial Agreement?
BFA’s can be a useful tool to:
- Protect significant wealth;
- Safeguard potential inherited wealth;
- Protect family farms or companies; and
- Provide certainty in the event of separation.
How can I be sure my BFA is binding?
For financial agreements to be binding:
- They must be in writing;
- Each party must receive independent legal advice prior to signing the agreement and provide a statement to that effect; and
- Your legal practitioner must certify, in writing, that advice was provided in relation to the advantages and disadvantages of entering into the agreement.
Can a Binding Financial Agreement be challenged?
In some circumstances, BFA’s can be set aside, for example:
- Where the agreement was obtained by fraud (including non-disclosure of a material matter);
- A party to the agreement entered into the agreement for the purpose of defrauding or defeating a creditor or with reckless disregard of the interest of a creditor;
- The agreement is void, voidable or unenforceable;
- Circumstances have arisen since the agreement was made that make it impractical for the agreement or part of the agreement to be carried out – i.e. a term of the agreement cannot be complied with;
- Since the making of the agreement, a material change in circumstances has occurred (being circumstances relating to the care, welfare and development of a child of the marriage) and, as a result of the change, the child or a party to the agreement will suffer hardship if the agreement is not set aside; or
- In the making of the agreement, a party to the agreement has engaged in unconscionable conduct.
Unfortunately, the law in respect to the setting aside BFA’s is unsettled. Therefore, it is important that any BFA is well-drafted by a lawyer experienced in family law, to limit the possibility of it being set aside.
At Meillon & Bright, our family lawyers will work with you to advise on, and draft binding financial agreements to protect your rights and financial situation.
In addition, we can also review and provide advice to clients who have already had a financial agreement drafted and presented to them for consideration by their former spouse or partner.