Entering into Binding Financial Agreements (BFA)

Binding Financial Agreements (BFA) may be entered into either before marriage or cohabitation, during marriage or cohabitation or after a marriage or domestic relationship has broken down. BFA’s entered into prior to marriage are often also referred to as “Pre-Nuptial Agreements” and are increasing in popularity. In October 2009 the Law Council issued a statement warning couples of the problems associated with entering into Binding Financial Agreements in the absence of legal advice and especially warned about the use of Do It Yourself Kits.

The Family Law Act requires both parties to a BFA to have obtained independent Legal Advice and a Certificate signed by a solicitor. Binding Financial Agreements entered into before marriage or cohabitation can provide parties with a mechanism to record their intention and agreement with regard to the division of their property/assets in the event of a breakdown their relationship. When executed correctly they can be a useful tool to assist parties. Independent Legal advice is imperative to ensuring your BFA is binding and enforceable it may be also necessary to obtain financial planning advice to ensure that from a financial perspective the proposed agreement is suitable. As an alternative to Binding Financial Agreements parties can obtain orders from the Family Court of Australia which is more usual than Binding Financial Agreements.

Should you wish obtain further information regarding the advantages and disadvantages of Binding Financial Agreements contact Howard Bear or Lisa Rees of our office.