A Binding Financial Agreement (BFA) is an agreement between de facto, soon to be married or already married couples which is made either before, during or after their relationship. A BFA addresses how assets, financial resources and liabilities may be divided in the event of relationship breakdown.
Couples are able to enter into a BFA where:
- They have no other BFA with any person;
- They are ordinarily a resident living in Australia; and
- They are made in contemplation, during or after the breakdown of a de facto relationship or a marriage. In order for a BFA to be valid and enforceable, the agreement must be:
- In writing and refer to all the relevant sections of the Family Law Act 1975 (Cth);
- A specific type of agreement relevant to when it was created and the circumstances; and
- Signed by all parties Furthermore, the parties must obtain separate legal advice with respect to entering into the agreement and the advice must be obtained from a different solicitor from a different firm. Once this has been completed a copy of a certificate of advice should be signed by each parties’ lawyer and provided to both parties as well as attached to the agreement. BFAs are not always enforceable, particularly if they do not conform with the requirements under the legislation. This was the case in Black and Black (2008) FLC 93-357, where the Court set aside the agreement due to the agreement not conforming to the relevant requirements. In circumstances where there has been disadvantage, undue influence or unconscionable conduct on behalf of one of the parties against the other, the BFA will also be deemed voidable. In the recent case of Thorne v Kennedy  HCA 49, the High Court found, on appeal, that both the BFA before the marriage, and the BFA made after the marriage, were voidable due to unconscionable conduct and undue influence where the appellant was coerced into signing the documents, this was despite her seeking her own legal advice. Where you wish to prepare and execute a BFA it is vitally important the agreement is drafted correctly and in uniformity with the legislation. Let the friendly and experienced staff here at LBC Lawyers assist you to ensure that the agreement between you and your partner reflect your intentions in the event that the relationship breaks down.