Family Law Binding Financial Agreements
Binding Financial Agreements ('BFAs')
Binding Financial Agreements are a contract between a person and their partner setting out their agreement for financial separation in the event of a breakdown of their marriage or de facto relationship.
BFAs are often mistakenly referred to as a 'pre-nuptial agreement' or a 'pre-nup', which is an American concept. A 'pre-nup' is made before the parties are married.
There is no concept of pre-nuptial agreements, prenup agreements or prenups in Australia. The acts deliberately do not make any reference to the phrase 'pre-nuptial' to draw the distinction that BFAs are a completely difference concept.
Many people however still refer to BFAs as pre-nuptial agreements.
Part V111A of the Family Law Act 1975 (Cth) is where you will find the legislative provisions for BFAs for married couples, Part 5A Division 3 of the Family Court Act 1997 (WA) for de facto couples in Western Australia and Part V111AB Division 4 of the Family Law Act 1975 (Cth) for de facto couples in other States and Territories.
For good reason BFAs can not be entered into quickly or as a last minute decision.
WHY LAWYERS ARE NEEDED
- To enter into a valid BFA parties will need the involvement of 2 experienced and independent family lawyers. Drafting a BFA that will withstand future challenge is a complicated task and the lawyers must have an extensive knowledge of all the technical requirements.
- There have been a number of cases that show the problems that can arise if BFAs are not properly prepared.
- Once the terms of the BFA are agreed and drafted into the correct form each party must obtain independent legal advice. Both parties must receive independent legal advice about the effect of the BFA on their rights and the advantages and disadvantages of entering the BFA.
- If either party breaches a term of a BFA then the other party can apply to the courts to enforce the BFA. The court can assist to enforce the terms of the financial agreement as if they were orders of the court.
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