Pre-Nup; Binding Financial Agreement (BFA)
Most people have heard the term “Pre-Nup”, short for pre-nuptial agreement. However, the correct legal term for all domestic partnership and marriage related agreements is Binding Financial Agreement, or BFA
BFA’s can include any of the following agreements:
- separation, and
- divorce agreements.
BFA’s are agreements made between either married or de-facto couples. BFA’s can be made either before or after the marriage or relationship commences and outline how the parties respective assets and liabilities will be dealt with in the event of a breakdown in the relationship. It is an agreement in advance of the relationship failing.
A BFA is a legal contract so it must be reasonable and cannot be signed under duress, or whilst under the influence of drugs or alcohol. To be valid both parties need to seek their own legal advice, from separate lawyers, usually from different law firms. Your lawyer has to sign a certificate confirming legal advice was given before the BFA was signed.
A BFA can introduce an element of certainty to a relationship, but can also create tensions – if you have not already discussed this with your partner we strongly urge you to bring up the subject in a sensitive way.
You need to be aware that if your situation changes, such as when children come along or long term partners become married, a new BFA might be needed.
Who can enter into a BFA?
You can enter into a BFA if you are planning to cohabit, getting married, separating, or divorcing, and whether you are in a heterosexual or same-sex relationship.