A binding financial agreement (BFA) is a legally enforceable agreement made between parties in a relationship or marriage, contemplating a relationship or marriage, or experiencing a relationship breakdown to determine the division of their property and financial resources in the event of a relationship breakdown.

Both married and de facto couples, or those contemplating marrying or becoming a de facto couple, can enter into a binding financial agreement. The agreement can be made prior to, during or even after the marriage or relationship. Binding financial agreements can also be made by same-sex couples.

A binding financial agreement can cover various financial matters, including the division of property, assets, liabilities, superannuation, and spousal maintenance. It allows parties to determine how their finances will be managed and divided without the need for court intervention.

A prenuptial agreement is a binding financial agreement, but not all binding financial agreements are prenuptial agreements. This is because the term ‘prenuptial agreement’ is used to describe a financial agreement made before marriage only, whereas the term ‘binding financial agreement’ is used to describe any financial agreement (which is legally binding because it meets certain legislative requirements), irrespective of whether it is made before or after marriage. Both deal with the same matters, such as how assets and property will be divided after the end of a relationship.

Having a binding financial agreement in place provides several benefits. It allows parties to have control over their financial arrangements, often avoids lengthy court battles, and provides a certain level of certainty and protection in the event of a relationship breakdown. It also allows parties to customise their financial arrangements according to their specific needs and circumstances.

When drafting a binding financial agreement, it is important to consider factors such as the value and nature of your assets and liabilities, your financial needs and responsibilities, potential future changes in circumstances, and the best interests of any children involved.

It is highly advisable to seek legal advice from an experienced family lawyer to ensure that your agreement adequately addresses these factors.

Yes, one of the requirements of binding financial agreements is that the parties involved must each obtain independent legal advice. The aim of this requirement is to ensure, inter alia, both parties understand their rights, obligations and what they are agreeing to.

The independent legal advice must come from different lawyers; the parties cannot use the same lawyer.

Yes, a binding financial agreement can be changed or updated, but it must be done through a formal process. Any changes or updates to the agreement must be in writing, signed by both parties, and like the initial binding financial agreement, they must be accompanied by a certificate of independent legal advice. It is essential to follow the proper legal procedures to ensure the validity of any amendments.

Yes, binding financial agreements are legally enforceable under the Family Law Act 1975 in Australia. However, for an agreement to be enforceable, it must meet certain legal requirements, including but not limited to being in writing, signed by both parties, and accompanied by a certificate of independent legal advice for each party. There may be circumstances in which an agreement is challenged or found to be invalid.

If one party fails to comply with the terms of a binding financial agreement, the other party can seek legal recourse. They may apply to the court for enforcement of the agreement, which can involve various remedies, such as orders for specific performance, financial indemnification, or other appropriate relief.

Yes, a binding financial agreement can be challenged or set aside in certain circumstances. Common grounds for challenging an agreement include fraud, undue influence, unconscionable conduct, non-disclosure of assets, or the manifestation of a significant change in circumstances making it impractical or unfair to uphold the agreement. If you believe that a binding financial agreement you’re involved in should be challenged, get in touch with a family lawyer to discuss your options.

The cost of creating a binding financial agreement can vary depending on various factors, including the complexity of the parties’ financial affairs, the extent of negotiation required, and the lawyer’s particular hourly rate. It is best to consult with your lawyer to obtain an estimate of the costs involved based on your specific circumstances.

Whether you’re looking to draft a BFA, you’re looking for independent legal advice or you’re looking to challenge or change a current binding financial agreement, here at Barram Family Law, we can help.

With more than 13 years of experience of practising family law, our knowledge is extensive and we’ve helped to prepare and/or advise on numerous binding financial agreements.

Our family law firm is based in Townsville, Queensland, and while we work with many people in the local area and surrounding region, including in Mt Isa, all of our family law services, including those related to property settlement proceedings, are available to people Australia-wide.

Get in touch with us by calling us on 07 4426 1980 or booking a free consultation here.