Binding Financial Agreements

A Binding Financial Agreement (BFA) is a written contract between two people of the same or different gender, who are in, or are planning to be in, a de facto relationship or marriage which outlines how the couple’s property or financial resources will be distributed if their relationship ends but it can also be used to formalise the financial division if their defacto relationship or marriage has already ended. A BFA can be entered into before, during or after a relationship. Some people refer to them to as pre-nuptial, post-nuptial, and post separation agreements.

If prepared and executed properly to ensure compliance with the strict formalities contained in the Family Law Act 1975 (Cth) or the Family Court Act 1997 (WA), a BFA is a legally binding and enforceable agreement, meaning that both parties are bound to adhere to the terms and conditions outlined within the agreement and they agree to give up their rights for the Family Court to determine any or all property and financial matters if their relationships has already ended or should end.

What are the requirements for a BFA to be legally binding?

A BFA is legally binding on the parties to the agreement if, and only if it meets all the requirements set out in the Family Law Act 1975 (Cth) or the Family Court Act 1997 (WA). Some of these requirements include but are not limited to the agreement being in writing and signed by both parties, both parties having obtained independent legal advice on their rights and the advantages and disadvantages at the time of entering into the BFA and have obtained certificates of independent legal advice from their legal representative which are included in the BFA and provided to the other party.

Terminating a BFA:

A BFA can be terminated by the parties by written agreement between them and there can be occasions where the parties enter into a new BFA. If one of the parties later decide that they longer agree with the BFA, it does not automatically mean that the BFA is no longer enforceable however, there can be situations where a party may have to apply to the Family Court to have the BFA set aside.

Setting Aside BFA’s:

There are certain circumstances set out in the relevant legislation in which a Family Court can set aside a BFA. These include but are not limited to where the agreement has been obtained by fraudulent means (including material non-disclosure), where the agreement is void or unenforceable as it does not comply with legislative requirements or where a party’s conduct in the making of the BFA was, in all the circumstances, unconscionable.

Legal Advice and Assistance:

Many people are looking to BFA’s in order to protect assets acquired by them before meeting the other party and to prevent the significant costs and stress that can be involved in financial separation matters via the Family Court following a relationship breakdown.

BFA’s can be complex legal documents which can have a significant on your future if you face a relationship breakdown. At Prime Law, we prepare and advise on a range of different types of BFA’s. Our family law solicitors are experienced with BFA’s and can guide you through the process.

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