Binding Financial Agreement

A Binding Financial Agreement (BFA), also known as a prenuptial agreement or a postnuptial agreement, is a legally binding contract entered into by a couple before, during, or after their marriage or de facto relationship. BFAs are primarily used in Australia to determine how the couple’s property, assets, and debts will be divided in the event of separation or divorce.

Here are some key points to know about Binding Financial Agreements:

  1. Voluntary Agreement: A BFA is a voluntary agreement between both parties, and it must be entered into with full knowledge and consent of each party. It is important that both parties obtain independent legal advice before signing the agreement.
  2. Financial Matters: BFAs typically cover various financial matters such as property division, spousal maintenance, superannuation (pension), and any other financial arrangements agreed upon by the couple.
  3. No Court Involvement: By entering into a BFA, the couple agrees to resolve their financial matters outside of the court system. This means that if a separation or divorce occurs, the agreement will guide the division of property, and the court will generally uphold the terms of the agreement, provided it meets the legal requirements.
  4. Legal Requirements: To be legally binding, a BFA must meet certain requirements under the Family Law Act 1975 in Australia. These include:a. The agreement must be in writing and signed by both parties. b. Both parties must have obtained independent legal advice before signing. c. The agreement must include a statement from each party’s lawyer confirming that advice was provided. d. The agreement must not be obtained by fraud, duress, or undue influence. e. The agreement should cover all necessary financial matters and be fair and reasonable at the time of signing.
  5. Review and Updating: It is recommended that couples review their BFAs periodically or when significant changes occur in their circumstances, such as the birth of children or the acquisition of substantial assets. If necessary, the agreement can be updated or terminated by mutual agreement.
  6. Enforceability: In most cases, courts will enforce a BFA if it meets the legal requirements. However, there are limited circumstances in which a court may set aside or invalidate the agreement, such as if it was obtained through fraud, if one party did not provide full and frank disclosure of their financial situation, or if the agreement is found to be unconscionable or unfair.

We have experience and expertise in preparing binding financial agreement and can provide you with the best possible legal advice on the process of the agreement.

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