Binding Financial Agreement or Prenup
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What is a Binding Financial Agreement?

A binding financial agreement is a legal document that sets out the way some or all of a couple’s assets will be divided in the event that their relationship ends. It can also include spousal maintenance.

What’s the difference between a Binding Financial Agreement and a prenup?

A prenup or prenuptial agreement is simply a binding financial agreement that is created before marriage.

When can you get a Binding Financial agreement?

You can get them at almost any stage of relationship whether you’re married or in a de facto relationship (same-sex or heterosexual):

‘Pre-nup’ or before marriage;
Before you enter into a de facto relationship
During a de facto relationship
During marriage and before separation or divorce;
During marriage but after separation;
After divorce
After separating from a de facto relationship

When are Binding Financial agreements most useful?

Lots of assets
Due a large inheritance or gift
Children from previous marriage
Business
Want to set up a trust
Ex-partner
Superannuation
While happy and no contention/arguments
Want to ensure that your decisions are taken into account rather than the Family Court
You and your ex-spouse have decided amicably on the best way to split assets

What are the legal requirements for a Binding Financial Agreement?

They all provide security and certainty for you and your family but they have strict legal requirements including the following:

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Advantages and Disadvantages of BFA

ADVANTAGES	DISADVANTAGES
BFA can incorporation both financial (incl. superannuation) and parenting arrangements.	There is no central register, such as a court, which can be checked if the BFA is lost or destroyed;
It can include child support arrangements;	here is no independent oversight by the court to ensure the agreement is ‘just and equitable’ as required in property consent orders;
More flexibility than consent orders;	The bargaining power between the couple may be unequal;
	The BFA cannot be varied and continues after death.

Reasons for setting aside a Binding Financial Agreement

Although a Binding Financial Agreement cannot be terminated, it can be set aside by the court for the following reasons:

Fraud
If one party is trying to defraud or defeat a creditor;
Since the making of the agreement, there has been a material change in circumstances in relation to the care and welfare of a child to the marriage which will result in hardship for the child or a party to the agreement;
The agreement covers at least one ‘unsplittable’ superannuation interest.

It’s vital you receive legal advice in relation to a binding financial agreement. VHL is very happy to discuss your requirements for a BFA during the consultation with Vania Holt either by zoom, phone or in-person (once restrictions have lifted).

NB This does not constitute legal advice and does not include reference to your specific needs. We urge you to speak with a solicitor to discuss your circumstance.

Binding Financial Agreement or PrenupAre you ready to put your life in order?