BFA family law stands for Binding Financial Agreements. In divorce or separation cases, there will be property settlement and financial arrangements. This is when binding financial agreements become useful. BFAs help the separating couple sort out their financial relationship.
BFA family law is also commonly known as pre nuptial agreements or simply as prenup. They are used interchangeably and have the same meaning. But what exactly is the purpose of a BFA under the Family Law Act?
BFAs, or prenuptial agreements, are documents that contain information about the manner of dividing a couple's property, assets, superannuation, and liabilities after the breakdown of a marriage or relationship.
While the common practice is to enter BFA family law before a relationship, couples can also enter into this agreement either during the course of their relationship, or after their relationship has ended. In other words, couples, including same-sex couples can enter into BFA in family law in the following scenarios:
- Before entering a de facto relationship, or before getting married
- During the course of a de facto relationship or marriage
- During a separation or before filing for a divorce; or
- After a divorce or the breakdown of a de facto relationship
Essentially, once both parties have entered into the BFA, under the Family Law Act, the parties give up all their rights to determine any financial matters or property matters, in the event of a breakdown of their relationship.
How To Make a BFA Family Law Binding?
According to the Family Law Act (1975), there are certain requirements to make aBFA legally binding. The agreement becomes binding on both parties only if the parties comply with the following requirements:
- Both parties must sign the agreement;
- The parties are either planning to enter a marriage or de facto relationship; the parties are in a marriage or de facto relationship; or the parties have separated or divorced;
- Both parties to the agreement provide a statement which declares that each party obtained independent legal advice on their rights, and advantages and disadvantages at the time of obtaining advice;
- A legal practitioner must provide each party a signed statement-either before or after signing the agreement. This certifies that advice on the parties' rights and advantages and disadvantages in entering the BFA was given to the party;
- The other party must have a copy of the statement from the legal practitioner. Their legal practitioner may also receive the copy;
- The agreement is a valid one that has not been set aside by the court, or terminated because of any reason; and
- If the parties make the agreement after divorce, it must include a separation declaration.
Can Courts Set Aside BFAs?
Sometimes, there can be errors in the preparation and execution of BFAs. If this happens, the court can set aside the agreement, in accordance with Section 90K of the Family Law Act (1975).
There are various reasons why the courts set aside BFAs. These include:
- A party failed to disclose all information regarding assets, or any other information which is relevant to the agreement. The court considers such failure to disclose relevant information as fraud.
- The parties enter the agreement only for the purpose of defrauding or defeating a creditor, or with disregard to the interests of the creditor.
- If the court deems it to be impractical to carry out with the BFA in question.
- If the court finds the agreement to be void, under contract law terms such as due to any mistakes, misrepresentation, public policy, duress, a breach of the agreement, or unconscionable conduct.
- If the party's circumstances have changed significantly, such as financial hardships or continuing care of children.
- If there are any issues with superannuation, for instance if the interests of the superannuation cannot be split.
- If the court deems that setting aside the BFA in question would be just and equitable.
Terminating BFA In Family Law
Terminating a BFA is possible under the law. The grounds for termination are the following:
- The parties enter into another financial agreement. This ground requires that there is a specific provision in the new agreement which declares the termination of the former agreement; or
- The parties enter into a "termination agreement" in accordance with Section 90J (for married couples) and Section 90UL (for de facto couples).
Similar to the case of the original BFA, the parties must sign the termination agreement. Moreover, each of the involved parties must have received independent legal advice with respect to the termination agreement.
Ask a Family Lawyer for Legal Guidance
When determining whether entering into a BFA is the right option for you, you need to speak with experienced lawyers who can deal with your case by providing tailored advice to you. Lawyers can help you with preparing binding financial agreements, as well as by providing independent legal advice to you.
At JB Solicitors, our reliable and experienced family lawyers have a wealth of experience in dealing with such cases. We also have fixed-fee pricing for family law services allowing you to have a clear sense of the costs right from the start. With JBS, you can rest assured that your experience in dealing with BFA related matters will be pain-free and hassle-free.
If you need more information on BFA in family law, please read below to see other articles from our family blog which is relevant to this topic.
- What is binding financial agreement?
- Prenuptial agreement cost.
- Using binding financial agreements to protect your assets.
- Binding financial agreements: advantages and disadvantages.
For more information on topics under family law, click here to visit the family law blog on JB Solicitors' website. If you have more enquiries on BFA in family or or general law-related enquires, please do not hesitate to get in touch with our friendly and experienced team of lawyers.
Contact JB Solicitors today.
If you prefer watching videos over reading blogs, check this brief video on BFA in family law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
