Binding Financial Agreements (“BFA”) can be commonly known as ‘prenuptial agreements.’ These are important in protecting your assets if your relationship breaks down. Agreement can be made before, during or after a marriage or de facto relationship.
Scope
A BFA can cover most issues, such as how property and money are distributed and ongoing financial support after the breakdown of the relationship. A BFA, however, cannot cover parenting issues.
Legal effect of a BFA
If a BFA is valid, it removes the court’s jurisdiction to issue orders about the distribution of assets which would otherwise be governed by the
Family Law Act 1975 (Vic) (“FLA”). The BFA does not have to be lodged with the court when it is made, rather only when applying to enforce the BFA through the Family Court.
Requirements for creating a valid BFA
The BFA must be in writing and both parties must sign it. Each party has to obtain independent legal advice about the agreement prior to signing it. This advice must detail how the BFA will affect their rights and the advantages and disadvantages of signing one of these agreements. A signed statement to this effect must be provided by each legal practitioner and attached to the BFA. All parties must have their own copy of the agreement.
Altering the Agreement
The BFA can be altered, although all of the above requirements have to be met again to ensure that it remains an enforceable, valid agreement.
Terminating the BFA
It can be difficult to terminate a BFA unless both parties consent to it. Otherwise, as long as the BFA complies with the above requirements it
is a binding and enforceable agreement against both parties.
Notwithstanding the desire for a BFA to be legally binding when made, it may be set aside later by a party applying to the Court on one or more grounds – click here for the potential grounds for setting aside.
