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A binding financial agreement (BFA) is an agreement which takes into account the division of assets, and if required, spousal maintenance, if the relationship were to break down. A BFA includes a brief background of the relationship, assets that each party had prior to the commencement of the relationship, assets the parties acquired during the relationship, and what assets will be retained by each party after the relationship has ended.
Our Family Lawyers have extensive expertise in the preparation of Binding Financial Agreements in both prenuptial (pre-nup) and post relationship (post-nup) scenarios, to assist you in protecting your interests.
A BFA should clearly set out what each party will receive in the property settlement, including any payments of spousal maintenance.
As a BFA can only deal with the division of assets, it excludes and does not cover parenting and child custody matters. A BFA can be entered into at any time during the relationship, such as before living together, and even after separation or divorce.
A BFA can be a very cost effective and time effective method of formalising how the parties decide to divide the assets, if agreeable, and avoid the unnecessary costs associated with litigating the matter at Court. Alternatively, Consent Orders can be prepared and made by the Court which can deal with parenting and child custody matters, if appropriate.
For a BFA to be legally enforceable, it is imperative that each party obtains independent legal advice. Without a solicitor’s certificate incorporated for each spouse of the agreement, the BFA is invalid.
If one party has little to no assets, speaks poor English, or does not have their own lawyer to advise them on the terms of the BFA, then the risk of the agreement being invalid is greater.
As an alternative to a BFA, read more about Consent Orders here.
If you and your partner are in agreement, the BFA can be revised every few years, or when circumstances change (such as having children).
After discussions with the other spouse or their lawyer, we can often resolve issues through negotiation. Cooperation is key to both parties signing and complying with the BFA.
If expecting large inheritance in the future, you can make a BFA (pre-nup) that will exclude your partner from claiming said inheritance.
Yes, a BFA can exclude specific assets and/or properties, such as pre-marriage assets that you have acquired on your own and wish to exclude your partner from making a claim to them if the relationship were to fail.
Yes, as circumstances change, nothing remains 100% certain. If your circumstances changed, such as where there had been a child born since the execution of the BFA, or there was a failure to disclose certain information, then the BFA may be scrutinised by the Court and found not to be valid.