Often known by its American counterpart as a “prenup”, Binding Financial Agreements (BFAs), as they’re known in Australia, are private agreements between a couple that stipulate how property, assets and liabilities of the parties are to be dealt with on beak down of the relationship.
A couple may enter into a BFA:
BFAs are governed by the Family Law Act 1975 (Cth) (the Act) and must be drafted in accordance with the requirements set out in the legislation. If a BFA does not correctly comply with the Act, it could be deemed as void and set aside by the Court.
When drafting a BFA, it will need to:
Other circumstances which may render a BFA as void, and therefore not binding on the parties:
Whilst it is usually the parties’ intention to be bound by the terms of a BFA, it is evident from the information above that if a BFA is not carefully drafted in accordance with the legislation, or if one party enters into the agreement as a result of undue influence, it highly likely that the agreement, if disputed, will be set aside by the Court and therefore no longer enforceable.
The best way to avoid having your BFA being set aside by the Court, is to get in touch with our Family Law team, who can provide you with detailed advice and assistance with drafting your BFA so that it lasts the test of time (so far as practically possible!).