Binding Financial Agreements & Prenups
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Binding financial agreements (BFA) can be a way to outline how your property and assets will be divided if your relationship breaks down. It is becoming more common in Australia to prepare a BFA before marriage (aka “a prenup”) but it is also possible to create them during and after the relationship. However, for a BFA to be legally binding, there are a number of requirements that need to be met. We recommend seeking legal advice from one of our experienced family lawyers if you’re considering a binding financial agreement.
What is a binding financial agreement?
A binding financial agreement is a contract setting out the agreement reached between two parties for the division of property, assets, superannuation, and liabilities (aka property settlement) or how maintenance would be paid in the event of, or following a divorce or de facto relationship breakdown.
Is it worth getting a binding financial agreement?
BFA’s can be beneficial in the event of, or following, divorce or relationship breakdown. Parties can enter into a BFA at any stage of a relationship – prior to (a prenuptial agreement), during or following cohabitation. This means that if the relationship does result in a breakdown, agreeing on the terms of the BFA in advance may eliminate unnecessary conflict, bring a sense of security to both parties and allow greater control and choice over finances. Particular assets, would be able to be preserved and protected by entering into a BFA.
A BFA can also be prepared post-separation for the parties to forgo any entitlement to spousal maintenance in the future.
However, in certain circumstances, a BFA could be set aside. We recommend speaking with our separation and divorce lawyers who can detail the advantages and disadvantages of entering a BFA to ensure you fully understand the process.
How to get a binding financial agreement
To acquire a BFA, both parties will need to have received independent legal advice before executing the agreement. This is to ensure that the parties are fully aware of the aspects and implications that a BFA entails and that a party does not unknowingly enter into an agreement that is not in their best interest.
At Culshaw Bishop Lawyers, our solicitors are highly experienced in advising and drafting binding financial agreements. We assure our clients with the peace of mind that we will tailor the BFA to their specific needs.
Can a binding financial agreement be overturned?
In limited circumstances, the Court will be able to set aside an agreement. Our prenup lawyers will be able to advise you as to whether you have grounds to set aside the BFA.