Preparing an Airtight Binding Financial Agreements
Binding Financial Agreements (BFA), also referred to as “pre-nups” are created when two parties have made a fully informed decision to enter into a binding agreement. The creation of an Airtight Binding Financial Agreements requires the parties to disclose their financial position, provide reasonable time to consider the agreement and obtain independent legal representation to avoid any undue influence or pressure on the other party.
This document effectively allocates assets and other financial resources in the event the marriage or relationship ceases. Whilst many people believe planning for divorce before the marriage begins is controversial or otherwise “unromantic”, a BFA is an integral part of prudent estate planning. This document is a mechanism similar to the preparation of a will or enduring power of attorney.
Requirements of Creation
To create binding financial agreements, several requirements must be met in accordance with the Family Law Act, including:
Each party receiving independent legal advice;
Both party’s lawyers signing a certificate that advice has been provided; and
Both parties acknowledge they have received said advice.
If these requirements are not met, the agreement can be set aside by application to the Federal Circuit Court of Australia. In addition to failing formal requirements, the agreement may also be set aside in circumstances where:
The agreement is subject to fraud, undue influence, or unconscionability;
There has been a material change making the agreement impractical or void; or
The effect of the agreement would cause hardship on one party where a child is
To understand more, and seek clarity on your matter to create an Airtight Binding Financial Agreements please consider a Free 20-minute initial consultation with an experienced family lawyer in Brisbane.