Written by Bailey Miles
Prenuptial and postnuptial agreements are legally referred to as Binding Financial Agreements or BFA’s in Australia. These agreements outline how property, assets, liabilities, and other financial matters will be dealt with in the event of separation. Whether you own a property, are expecting an inheritance, want to start a family, run a small business, or simply want certainty about your financial arrangements, a BFA can offer peace of mind.
BFA’s are far from being a tactic or tool used by the rich, instead these agreements are becoming increasingly more common as a technique to avoid the lengthy, costly, and emotional court process.
Especially as property values continue to rise and financial arrangements become more complex, we are seeing more couples recognise the benefits of having a binding agreement in place.
Entering into a BFA provides certainty as it allows couples to “contract out’ of the usual property settlement framework, and to some extent, spousal maintenance. It also protects each party as it allows one or both partners to protect assets important to them e.g., inheritances, lottery wins or properties.
It is crucial to understand that whilst these agreements can be drafted with precision, it is possible for BFA’s to be challenged in court should one of the following examples be applicable;
- It is void or unenforceable;
- It is impractical for all or part of the BFA to be carried out;
- There has been a significant change in circumstances in relation to the care of the child and as a result hardship would occur;
- It was fraudulently obtained, including with non-disclosure; or
- One party was under duress when entering into the Agreement.
If you are considering entering into a Binding Financial Agreement, it is crucial that you and your partner consider updating the agreement as life changes (as you would with your will). If you have been asked to sign a BFA or are considering a BFA for you and your current/previous partner, it is vital that you seek legal assistance throughout.
Please get in touch with the Richardson Murray team for a private, confidential, and free consultation.