You’ve heard of it in the movies, you’ve seen them in the magazines, a prenup that celebrities enter into before they get married.
Here in Australia, it’s so much more than that. It’s called a Binding Financial Agreement. You can enter into a Binding Financial Agreement or a BFA at the commencement, before entering into a de facto relationship or a marriage, during your relationship or at the end of a relationship, at separation.
A binding financial agreement will set out how your assets, your liabilities and your financial resources will be divided in the event of separation. It can also provide for spousal maintenance.
A BFA is not approved by the court. If you enter into a BFA, the court will not have the power to make orders relating to anything that’s dealt with in the agreement. As a result, a BFA will only be binding if the agreement itself attaches a certificate from independent solicitors, stating that both parties have received independent legal advice on the advantages and disadvantages of entering into that agreement.
In some circumstances, a BFA may be set aside by a court based on a technicality. It’s therefore my preference that you use consent orders, wherever possible, rather than a BFA as consent orders provide more certainty, and the court will deem the orders just and equitable at the time they make the orders.
As consent orders have far less technical requirements than a binding financial agreement, they’re generally cheaper to the client.