Binding Financial Agreements Including Prenuptial Agreements
A Binding Financial Agreement (BFA) is a private contract entered into in writing between two or more parties which is pursuant to and in compliance with Part VIII or Part VIIIAB of the Family Law Act 1975 (Cth).
BFAs provide a way for parties to a marriage or de facto relationship to document their agreement as to the division of property, spousal maintenance and certain other issues without the involvement of the court. They enable parties to resolve issues privately and can be entered into before, during or after the end of a de facto relationship or marriage. The intention of a BFA is usually to avoid the need for parties to engage in costly, time consuming and stressful court proceedings in respect of the division of property.
BFAs can be entered into at different stages of a marriage or de facto relationship and the different types may be summarised as follows:
- Between parties contemplating marriage (most commonly known as a Prenuptial Agreement);
- Between parties contemplating entering into a de facto relationship (both heterosexual and same-sex);
- Between parties during a marriage;
- Between parties during a de facto relationship (both heterosexual and same-sex);
- Between parties after divorce; or
- Between parties after the breakdown of a de facto relationship.
When contemplating entering into a BFA, it is important to be aware that they are complex legal documents and there are specific requirements that must be strictly complied with in order to enforce their terms, included but not limited to:
- The BFA must be in writing;
- It must be signed by both parties; and
- Prior to signing, each party must have received independent legal advice in relation to the BFA and provide evidence of such advice in writing to attach to the BFA.
There are several other legal requirements that must be observed and adhered to in order for your BFA to be legally binding.
The family law team at Owen Hodge Lawyers are experienced in drafting, reviewing and advising on all BFAs and would gladly assist you through the process to minimise any unnecessary stress. Contact us at 1800 770 780 for more information and friendly assistance.
Pre-marriage BFAs, commonly known as prenuptial agreements, are entered into between parties who are contemplating marriage. They generally stipulate how the parties' financial relationship will be finalised in the possible yet undesirable event of separation. It is worth noting that prenuptial BFAs function the same way as BFAs entered into between parties contemplating a de facto relationship.
While many consider the concept of prenuptial agreements as somewhat unromantic or distrustful, they should be viewed as an opportunity to engage in honest and realistic discussions with your spouse regarding your financial affairs. Money and children are two issues that most commonly cause emotional strain in a relationship. This further supports the concept of pre-planning and healthy discussion from the outset of a relationship. It is better to address issues of a sensitive nature at a time when both parties are more likely to consider the best interests of the other and apply a fair and sensible approach to the situation. BFAs provide parties with an opportunity to enter into a relationship with a peace of mind regarding their finances and alleviate any additional stress that may arise in the event of separation.
Prenuptial agreements are particularly appealing to people entering into subsequent relationships where each party may wish to protect interests of beneficiaries of their estates including their respective children. The law is complex in regards to this area, and detailed advice should be obtained in relation to using binding financial agreements as an additional estate planning tool.
If you are contemplating marriage or wish to formalize the financial arrangements you have made with a de facto partner, you should consider the potential advantages of a prenuptial BFA. Owen Hodge Lawyers Family Law Solicitors have extensive experience with all types of BFAs, making particularly well positioned to help our clients.
At Owen Hodge Lawyers, we consider pre-marriage or pre – de facto relationship BFAs as a necessary and beneficial financial planning exercise for all couples, whether young or old, in contemplation of marriage.
Some advance work with one of Owen Hodge Lawyers' family law solicitors may serve to strengthen your relationship, rather than foreshadow its end. Contact us at 1800 770 780 for more information and friendly assistance.
Who should consider a Prenuptial Binding Financial Agreement?
Prenuptial BFAs may be a particularly good idea where:
- One party is entering the relationship with considerably more assets than the other;
- It is a second or subsequent marriage of either or both parties, and there are children of prior relationships who need well-defined financial support;
- Where one party anticipates a large inheritance or gift;
- For those natural planners who just prefer to get everything settled in advance for peace of mind.
If you feel that you fall into any of the above categories then we strongly recommend seeking the advice of one of our Family Law Solicitors at Owen Hodge Lawyers. Contact us at 1800 770 780 for more information and friendly assistance.
What issues can a Binding Financial Agreement cover?
A BFA may cover anything that any other contract may, but BFAs pursuant to the Family Law Act 1975 (Cth) generally deal with and may have clauses covering the following:
- The specific division of property in the event of separation or divorce or after separation or divorce has occurred;
- Providing financial support to a party (spouse maintenance) either during marriage or a de facto relationship, or in the event of separation, divorce or death of the other spouse;
- Providing for the guardianship of children of either party;
- Setting out the terms of child support for a named child or children;
- In some cases adult child maintenance; and
- Claims on the other party's estate after death.
The above is a non-exhaustive list of areas which may be dealt with in a BFA and at Owen Hodge Lawyers we are aware that every situation is different and requires a unique and tailored approach.
BFAs may not provide for anything illegal, such as bigamy, or fraud, such as an attempt to evade creditors. They also cannot affect the rights of individuals or entities who are not a party to the agreement. BFAs cannot determine child custody or visitation; parties must enter into Consent Orders if they agree on arrangements in respect of children which are filed at the court to ensure they are focused on the best interests of the children.
If you would like more information on entering into a BFA regarding any of the abovementioned categories, we urge you to contact our Family Law Team at Owen Hodge Lawyers on 1800 770 780.
Do BFAs get challenged in court?
If a BFA is challenged by a party, the court will be particularly concerned as to whether or not the BFA was entered into willingly, with complete knowledge of all relevant circumstances, and if the BFA has properly complied with the legislation in the Family Law Act 1975 (Cth).
To be enforceable:
- A prenuptial agreement must be in writing, dated, signed and witnessed by all parties;
- It must be based on an acknowledgement that full and frank disclosure of all assets and liabilities has taken place between the parties;
- If parties have legal representation, both parties must retain separate lawyers to ensure they receive unbiased and independent legal advice;
- The agreement must not have been signed under duress, coercion, or undue influence. For this reason, in the case of prenuptial BFAs, most attorneys advise that it be executed at least 60 days before the wedding;
- The provisions of the agreement must be legally permitted.
Under section 90k of the Family Law Act 1975 (Cth), BFAs that do not meet these standards may be set aside if challenged. Courts may also refuse to enforce agreements or parts of agreements that have become impracticable because of changed circumstances or where a material change in circumstances has occurred including if the welfare of a child/ren would result in hardship for the caregiver.
When drafting and advising on BFAs, the above elements need to be considered carefully and attention should be given to each requirement.
Owen Hodge Lawyers' Family Law Team is experienced in drafting legally enforceable Binding Financial Agreements. For more information and friendly assistance contact us on 1800 770 780.
Binding Financial Agreements During or After Marriage and De Facto Relationships
BFAs can be entered into at any time, not just before a marriage. They can bring financial clarity and a sense of resolution to de facto or married couples who remain together in a happy relationship, or who have already separated or divorced. BFAs entered into by de facto couple apply equally to both heterosexual and same-sex couples.
BFAs entered into during or after the breakdown of a relationship should be as carefully negotiated as those entered into before marriage or a de facto relationship. They may cover the same issues and can bring many of the same advantages.
BFAs entered into at any phase of a relationship may have wide-ranging implications on your estate, retirement arrangements or your business, especially if you and your spouse are business partners.
Owen Hodge Lawyers is a full service firm with extensive experience in all areas of personal and business law, and we can help you with comprehensive legal planning and representation. If you would like assistance with a Binding Financial Agreement including Prenuptial Agreements, please call us 1800 770 780.
Family Law Consultations In Wollongong and the Illawarra
(By Appointment Only)
We offer professional and discreet family law face-to-face consultations in Wollongong and the Illawarra at a location convenient to you. To arrange a personal consultation with one of our experienced family lawyers in Wollongong, please contact Owen Hodge Lawyers on 1800 770 780 or contact us via firstname.lastname@example.org.