WHAT IS A BINDING FINANCIAL AGREEMENT?
A Binding Financial Agreement (BFA), sometimes also referred to as a “pre-nuptial agreement”, is a private agreement entered into by two people that set out parties’ properties, superannuation, assets and spousal maintenance in the event of marriage breakdown. A Binding Financial Agreement may be made before, during or after marriage (or before, during or after a de facto relationship).
A Binding Financial Agreement ousts the Court’s jurisdiction to make an order concerning the alteration of property or an order for maintenance (if those matters are dealt within the agreement). In other words, a Binding Financial Agreement allows parties to formalise an agreed property division without the need to approach the court.
Section 90G of the Family Law Act sets out certain criteria before a financial agreement can become binding on the parties, including
- The agreement is in writing and signed by all parties
- The agreement includes a signed certification that each party has obtained independent legal advice (certificate of legal advice)
Setting aside a Binding Financial Agreement
A Binding Financial Agreement can only be set aside in limited circumstances, such as:
- the agreement was obtained by fraud (including non-disclosure of a material matter)
- a party engaged in unconscionable conduct
- a party entered into the agreement for the purpose of defeating a creditor
- the agreement is void, voidable or unenforceable
- circumstances have arisen since the agreement was made making it impracticable for the agreement to be carried out
- a material change in circumstances has occurred (relating to a child) that will cause hardship if the agreement is not set aside