BFA stands for Binding Financial Agreements. BFA in family law is a crucial concept when dealing with divorce or separation cases. This article aims to discuss what BFA in family law means.
Firstly, note that binding financial agreements are also commonly known as prenuptial agreements or simply as prenup. They are used interchangeably and have the same meaning. But what exactly is the purpose of a BFA in family law?
BFAs, or prenuptial agreements are documents which contain information about how a couple’s property, assets, superannuation and liabilities will be divided following the breakdown of a marriage or relationship.
While most commonly BFA in family law are entered into 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.
Requirements To Make BFA In Family Law Legally Binding
According to the Family Law Act (1975), there are certain requirements which need to be fulfilled in order to make a binding BFA. The agreement becomes binding on both parties only if the following requirements have been met.
- The agreement has been written and signed by both involved parties;
- 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;
- Each party was provided with a signed statement from a legal practitioner – either before or after signing the agreement – which certifies that advice on the parties’ rights and advantages and disadvantages in entering the BFA was given to the party;
- A copy of the statement from the legal practitioner is given to the other party, or the legal practitioner of the other party;
- The agreement has not been set aside by the court, or terminated because of any reason; and
- Unless the agreement is entered into after divorce, it must include a separation declaration.
Reasons Why Courts Set Aside BFA In Family Law
Sometimes BFAs are not prepared and executed properly. If this happens the court can set aside the agreement, in accordance to Section 90K of the Family Law Act (1975).
There are various reasons why BFAs can be set aside. These include:
- A party failed to disclose all information regarding assets, or any other information which is relevant to the agreement. A failure to disclose assets or liabilities at the time of agreement is seen by the Court as an agreement obtained by fraud.
- The agreement was entered into with the only purpose to defraud or defeat 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
A binding financial agreement can be terminated. BFA in family law can be terminated if:
- the parties enter into another financial agreement, provided that there is a specific provision included in the new agreement which states that the former agreement has been terminated; 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, a termination agreement must also be signed by all parties to the agreement, and each of the involved parties must have received independent legal advice with respect to the termination agreement.
Importance Of Seeking Legal Advice
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.
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If you prefer watching videos over reading blogs, check this brief video on BFA in family law.