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Family Law

Prenuptial agreements (binding financial agreements) in Australia

By January 17, 2017No Comments

By Gianna Huesch

Binding Financial Agreements (BFAs) are increasingly popular, but are some unenforceable?

BFAs are contracts entered into by couples (married or de facto) that outline how assets will be distributed in the event of a relationship breakdown. They can be entered into before, during or even after a relationship, and apply equally to heterosexual and same-sex couples.

Introduced into the Family Law Act in 2000, BFAs have become more commonplace in the years since then, partly thanks to their normalisation through their popularity with celebrities. They are also thought to have become more common in recent times due to women becoming more financially independent ever than before, with more assets of their own to protect.

Once regarded as something only for the very wealthy, BFAs are now entered into more often by ordinary ‘mums and dads’. One lawyer also notes a trend in certain subcultures, such as among younger Chinese Australians who own property given to them by their parents.

Thanks again to the influence of celebrity culture, BFAs are mistakenly thought to be able to include any kind of ‘lifestyle’ clause you want. Of course, anything can be written into the contract, but not everything will be enforceable in the courts. For example, clauses about faithfulness or weight gain are simply not legal and have been regularly dismissed by our courts.

BFAs are also vulnerable to being set aside for other reasons, such as if a court determines that a BFA has been signed under duress. There have been a number of “ink on the wedding dress” cases before the courts where BFAs were set aside after partners attempted to get future spouses to sign agreements mere days before a wedding—and in one case, actually on the way to the wedding venue.

Other reasons a court might set aside a BFA include factors such as fraud or unconscionable conduct, or because each party did not obtain independent legal advice before signing. They may also be set aside if there are material changes to circumstances (ie. relating to children).

There are definite advantages in having a well-drafted, watertight Binding Financial Agreement. Having an enforceable contract helps keep couples out of the over-crowded court system, and removes the uncertainty that is inherent in having a judge determine the outcome. And although they are sometimes regarded as unromantic, BFAs can in fact reduce potential conflict by providing security and certainty to both members of a couple.

Source: http://www.theherald.com.au/story/4390777/prenuptial-agreements-offer-glimpse-into-secret-lives-of-couples/?cs=4219

Do you need legal advice in connection with a Binding Financial Agreement? Please contact Cristina Huesch or one of our other experienced solicitors here at Alliance Family Law on (02) 6223 2400.

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