In Australia, binding financial agreements or BFAs are legally binding documents that outline how a couple’s assets will be divided upon the breakdown of their marriage or de facto relationship. BFAs include information on how the couple’s property, assets including superannuation, and liabilities will be divided following a separation or divorce.
The Family Law Act (1975) outlines important provisions in relation to BFAs. Notably, when parties enter a BFA, they give up their rights under the Family Law Act for the family court to determine any financial or property matters after a divorce or separation.
Lawyers with expertise in family law can draft BFAs for their clients either before the marriage, during the relationship, or after the marriage or relationship ends.
BFA being set aside
There are strict conditions to adhere to when preparing a BFA. The Family Law Act sets out strict formalities, including that each party must sign the BFA, having been fully informed of its terms and consequences, and of their own free will.
Moreover, both parties need to sign the BFA for it be to valid. Each party also has to obtain independent legal advice from lawyers. Their lawyers can advise them about the advantages and disadvantages of entering a BFA.
However, if the Family Court believes that the BFA was not drafted properly, the court can set it aside. This typically happens in cases where either or both parties have failed to make full disclosures of all their assets and relevant financial information.
Similarly, if one party has obtained the BFA by fraud or duress, the court will set it aside. Consider a scenario where one party forces the other party to sign the BFA just before a wedding and threatens to cancel the wedding if they refuse to do so. This involves duress, meaning that the family court can set BFAs obtained in such a manner aside.
Other reasons that a BFA can be set aside is that there have been many changes in circumstances of the parties, including change in circumstances relating to children.
Family lawyers and financial agreements
Because of the complexity of such financial agreements, speaking with professionals such as family lawyers becomes very important. For this reason, it is recommended that you reach out to family lawyers or BFA lawyers who can assist you with preparing BFAs. This is because BFAs often requires expert advice as it can have serious consequences on your life.
