Binding Financial Agreement Lawyers in Mackay: What You Need to Know Before Signing a BFA

A Binding Financial Agreement (BFA) can provide greater certainty about how property, financial resources and certain financial responsibilities may be dealt with if a relationship breaks down. However, preparing a BFA is not simply a matter of putting an agreement on paper and asking both people to sign it.

Australian family law sets specific requirements for financial agreements, including requirements concerning independent legal advice and the circumstances in which an agreement may later be challenged or set aside.

If you are getting married, entering a de facto relationship, already in a relationship, or considering how your financial affairs will be handled after separation, advice from experienced binding financial agreement lawyers can help you understand your legal position before you commit to an agreement.

A Practical Example: How a Binding Financial Agreement Can Affect a Property Settlement

Consider a hypothetical couple from Mackay who marry after one partner has already accumulated significant assets, including a property and an established family business.

Before the marriage, both parties obtain independent legal advice and enter into a Binding Financial Agreement (BFA) that sets out how certain financial interests and property are intended to be dealt with if their relationship later breaks down.

Several years later, the relationship ends, and the couple begins discussing their divorce property settlement.

Because they already have a BFA, the terms of that agreement may become an important consideration when determining how the financial matters covered by the agreement should be dealt with. However, simply having a document labelled a “BFA” does not automatically mean that every provision will be enforceable.

How the agreement was prepared & executed can also matter: whether the statutory requirements were satisfied, whether both parties received the required independent legal advice, and whether any grounds exist to set the agreement aside can all be relevant.

This example shows why it can be important to seek advice from experienced binding financial agreement lawyers before signing an agreement. Proper legal advice can help each party gain a clear understanding of their legal position, responsibilities and how the proposed agreement may affect them.

Important: This is a fictional example provided for educational purposes only. It is not based on a specific client.

What Is a Binding Financial Agreement?

A Binding Financial Agreement is a written financial agreement between parties that deals with specified financial matters, including how property or financial resources may be dealt with if a marriage or de facto relationship breaks down.

The agreement may also address spousal maintenance and certain matters connected with the parties’ financial arrangements.

For married couples, the Family Law Act 1975 (Cth) provides several pathways for making financial agreements depending on the stage of the relationship. Section 90B deals with financial agreements made before marriage, section 90C deals with financial agreements during marriage, and section 90D deals with certain financial agreements made after a divorce order.

For de facto couples, the corresponding provisions are principally found in Part VIIIAB of the Family Law Act. Sections 90UB, 90UC and 90UD deal with financial agreements made before, during and after the breakdown of a de facto relationship respectively.

A BFA is sometimes commonly called a prenup or prenuptial agreement, particularly when it is made before marriage. However, “Binding Financial Agreement” is the broader legal terminology used under Australian family law.

Why Do People Make Binding Financial Agreements?

People enter into financial agreements for different reasons and at different stages of their relationships.

For example, a person may want to establish an agreed financial framework because they:

• Own significant property before entering a relationship.
• Have an established business or business interests.
• Expect to receive an inheritance.
• Have substantial superannuation or investments.
• Have previously been married or separated.
• Want greater certainty about financial arrangements if the relationship ends.
• Are entering a second or subsequent marriage.
• Want to address financial arrangements during a de facto relationship.
• Want to establish an agreement following separation.

What Is the Difference Between a BFA and a Prenuptial Agreement?

The term prenuptial agreement generally refers to a financial agreement made before a marriage.

Under section 90B of the Family Law Act, people contemplating marriage can make a written financial agreement dealing with matters such as how property or financial resources may be dealt with if the marriage breaks down and matters concerning spousal maintenance.

Depending on the circumstances, financial agreements can be made:

Before Marriage

Section 90B of the Family Law Act provides for financial agreements between people considering marriage. The agreement can address property, financial resources and spousal maintenance in the circumstances specified by the legislation.

During Marriage

Section 90C deals with financial agreements made during marriage. Importantly, the legislation provides that an agreement under this section may be made before or after the marriage has broken down.

After Divorce

Section 90D deals with certain financial agreements made after a divorce order has been made. These agreements can address property, financial resources and spousal maintenance as provided by the legislation.

Before or During a De Facto Relationship

Part VIIIAB of the Family Law Act contains the relevant framework for financial agreements involving de facto relationships.

Section 90UB deals with agreements made before a de facto relationship, while section 90UC deals with agreements made during a de facto relationship. Section 90UD deals with agreements made after the breakdown of a de facto relationship.

This means that a BFA is not exclusively a legal option for married couples.

What Can a Binding Financial Agreement Cover?

The exact terms of an agreement depend on the circumstances and the applicable legislative provisions.

A BFA may address matters relating to:

Property: This can include real estate and other property interests held by either or both parties.

Financial Resources: The agreement can address relevant financial resources under the applicable provisions of the Family Law Act.

Superannuation: Superannuation can be an important component of Australian property settlements. The Family Law Act has a separate regime for superannuation interests, including provisions on superannuation agreements and payment splitting.

Debts and Financial Liabilities: Understanding liabilities is an important part of assessing both parties’ overall financial position.

Business Interests: Where one party owns or operates a business, the financial structure and value of the business may need careful consideration when preparing a financial agreement.

Inheritances and Significant Assets: A person may want legal advice about how an existing or anticipated inheritance, investment, property interest or other significant asset should be considered when preparing an agreement.

Spousal Maintenance: Financial agreements can include provisions relating to spousal maintenance, subject to the requirements and limitations imposed by the Family Law Act.

How Can a BFA Affect a Divorce Property Settlement?

This is one of the most important questions to consider before signing a financial agreement.

A divorce property settlement generally involves determining how the parties’ financial circumstances and interests should be handled after a relationship breaks down.

A valid and binding financial agreement can provide a contractual framework for dealing with matters covered by the agreement.

However, signing a document described as a “BFA” does not automatically mean that every provision will always be enforceable.

You need to consider the legal requirements carefully, and the agreement must comply with the relevant provisions of the Family Law Act.

This is why obtaining advice from binding financial agreement lawyers before signing can be important. A lawyer can assess the proposed terms, explain their potential legal effect and identify issues that may need to be addressed before the agreement is finalised.

Do Both Parties Need Independent Legal Advice for a BFA?

Yes, independent legal advice is a critical requirement for a financial agreement to be binding under section 90G.

Under section 90G(1) of the Family Law Act, a financial agreement is binding if the statutory requirements are satisfied, including that:

• All parties sign the agreement;
• Before signing, each spouse party received separate legal advice from a qualified lawyer regarding how the agreement may affect their individual legal rights on that person’s rights;
• The advice addressed the advantages and disadvantages, at the time the advice was provided, of agreeing;
• The required signed statement from the legal practitioner is provided; and
• The agreement has not been terminated or set aside by a court.

The requirement for independent legal advice is therefore much more than simply asking a solicitor to witness a signature.

Why Is Independent Legal Advice So Important?

A financial agreement can significantly affect a person’s financial position.

Independent legal advice allows a person to understand:

• What rights they may have without the agreement;
• What rights they may have under the proposed agreement;
• The potential advantages of signing;
• The potential disadvantages of signing;
• How the agreement may affect property and financial resources;
• How the agreement may interact with their future circumstances.

It also helps ensure that each party makes an informed decision rather than simply signing an agreement prepared by or for the other party.

Can a Binding Financial Agreement Be Challenged?

A BFA is intended to be binding when the statutory requirements have been met, but “binding” does not mean that a court can never intervene.

Section 90K of the Family Law Act identifies situations where a court may overturn a financial agreement or termination agreement.

These circumstances include situations involving:

• Fraud, including non-disclosure of a material matter;
• Certain conduct concerning creditors;
• Certain circumstances involving another person in a de facto relationship;
• An agreement being void, voidable or unenforceable;
• Circumstances making performance of the agreement impracticable;
• Certain material changes involving the care, welfare and development of a child; and
• Other circumstances specified by the legislation.

What Happens If Important Financial Information Is Not Disclosed?

Financial transparency is an important issue when negotiating a financial agreement.

Section 90K expressly refers to fraud, including non-disclosure of a material matter, as one reason a court may overturn a financial agreement in certain circumstances.

Depending on the circumstances, this may involve considering:

• Real estate;
• Bank accounts;
• Investments;
• Superannuation;
• Business interests;
• Trust interests;
• Loans;
• Credit facilities;
• Other liabilities; and
• Other relevant financial resources.

Can a BFA Protect a Family Business or Inheritance?

A BFA may be considered where one party has substantial assets or financial interests that they want to address as part of a broader financial arrangement.

For example, someone entering a relationship may already own:

• A family business;
• Residential or commercial property;
• Investments;
• Shares;
• Significant superannuation;
• An inheritance; or
• Other valuable assets.

The appropriate treatment of these interests depends on the individual circumstances and the terms of the proposed agreement.

What If Circumstances Change After a BFA Is Signed?

Relationships and financial circumstances can change considerably over time.

For example:

• Children may be born;
• One party may receive an inheritance;
• A business may grow significantly;
• The parties may purchase property;
• One person may change careers;
• A party may experience illness or disability;
• The parties may relocate; or
• The parties’ financial circumstances may change substantially.

A financial agreement should therefore consider both the present circumstances and foreseeable changes.

BFA vs Consent Orders: What’s the Difference?

A BFA and consent orders can both be relevant when couples want certainty around financial arrangements, but they are different legal mechanisms.

What Are the Main Laws Governing Binding Financial Agreements in Australia?

For people in Mackay, Brisbane and elsewhere in Queensland, the principal legislation governing BFAs is Commonwealth legislation.

The key provisions include:

Family Law Act 1975 (Cth) – Part VIIIA

Section 90B: Deals with financial agreements made by people contemplating marriage.

Section 90C: Deals with financial agreements made during marriage. The legislation also provides that an agreement under this section may be made before or after the marriage has broken down.

Section 90D: Deals with certain financial agreements made after a divorce order.

Section 90E: Sets requirements concerning provisions in financial agreements relating to maintenance of a party or children.

Section 90F: Contains additional rules concerning provisions included in financial agreements.

Section 90G: Sets out important requirements including signatures and independent legal advice.

Section 90H: Addresses the operation of a financial agreement following the death of a party.

Section 90J: Provides for the termination of financial agreements in accordance with the legislation.

Section 90K: Sets out circumstances in which a court can overturn a financial agreement or termination agreement in certain circumstances.

Section 90KA: Provides for the validity, enforceability and effect of financial agreements and termination agreements.

Part VIIIAB – De Facto Financial Agreements

For de facto relationships, the relevant provisions include:

• s 90UA: geographical requirements;
• s 90UB: financial agreements before a de facto relationship;
• s 90UC: financial agreements during a de facto relationship;
• s 90UD: financial agreements after breakdown of a de facto relationship;
• s 90UE: certain agreements made under non-referring State laws;
• s 90UF: separation declarations;
• s 90UG: when certain provisions take effect;
• s 90UH: maintenance provisions;
• s 90UJ: when de facto financial agreements are binding;
• s 90UL: termination;
• s 90UM: circumstances in which an agreement may be set aside; and
• s 90UN: validity, enforceability and effect.

The Federal Register of Legislation identifies these provisions as part of the current financial-agreement framework under the Family Law Act.

What Other Family Law Provisions May Be Relevant?

A BFA may interact with other areas of Australian family law depending on the circumstances.

For example, the Family Law Act contains separate provisions dealing with:

• Property proceedings;
• Spousal maintenance;
• De facto financial matters;
• Superannuation interests;
• Court orders and enforcement;
• Bankruptcy-related issues; and
• Certain arrangements involving third parties.

Superannuation has its own provisions under Part VIIIB, including provisions concerning superannuation agreements and payment splitting.

Does Queensland Have a Separate BFA Law?

Binding Financial Agreements are principally governed by the Commonwealth Family Law Act 1975, rather than a separate Queensland BFA statute.

Therefore, if you are in Mackay or Brisbane, Queensland, the relevant legal framework is primarily the federal family law legislation.

The geographical location still matters because your lawyer needs to understand your circumstances, the relevant court processes and the broader Queensland legal environment. However, simply substituting Queensland terminology into a BFA template designed for another jurisdiction is not appropriate.

Why Choose Experienced Binding Financial Agreement Lawyers?

A BFA can have long-term consequences for your financial rights.

An experienced family lawyer can help you:

• Understand whether a BFA is appropriate for your circumstances;
• Identify the financial matters that should be considered;
• Review proposed terms;
• Explain your rights before you sign;
• Consider the treatment of property and financial resources;
• Address business interests and significant assets;
• Explain the implications for future property settlement;
• Provide independent legal advice where appropriate;
• Negotiate proposed terms;
• Identify potential legal risks; and
• Advise about changes or termination of an existing agreement.

Frequently Asked Questions About Binding Financial Agreement Lawyers

What does a Binding Financial Agreement do?

A BFA can establish agreed financial arrangements concerning matters such as property, financial resources and spousal maintenance, subject to the applicable provisions of the Family Law Act and the terms of the agreement.

Do both parties need their own lawyer for a BFA?

Independent legal advice is an important statutory requirement for a BFA to be binding under section 90G. Each spouse must receive independent legal advice about the agreement’s effect and its advantages and disadvantages before signing.

Is a prenup the same as a Binding Financial Agreement?

A prenup is a common term for a financial agreement made before marriage. A BFA is broader and can be made during various stages of a marriage or de facto relationship.

Can de facto couples make a Binding Financial Agreement?

Yes. Part VIIIAB of the Family Law Act provides for financial agreements before, during and after the breakdown of a de facto relationship.

Can a BFA deal with property?

Yes. The relevant provisions allow financial agreements to address how specified property and financial resources are to be dealt with in circumstances covered by the legislation.

Can a BFA deal with superannuation?

Superannuation can form part of financial arrangements, and the Family Law Act contains specific provisions governing superannuation interests and superannuation agreements.

Can a Binding Financial Agreement be changed?

The parties may be able to terminate or replace an existing agreement, but they must consider the relevant statutory requirements. Section 90J deals with termination of financial agreements for married couples, while section 90UL deals with termination of Part VIIIAB agreements for de facto relationships.

Can a BFA be set aside?

Yes, in certain circumstances. Section 90K identifies circumstances in which a court may set aside a financial agreement involving married couples, while section 90UM contains corresponding provisions for Part VIIIAB financial agreements.

What happens if my partner refuses to sign a BFA?

A person should not assume that a partner can simply be compelled to sign a financial agreement. Discuss the circumstances with a family lawyer, particularly if there are concerns about pressure, timing, negotiations, or the proposed terms.

Is a BFA better than consent orders?

Neither option is automatically better for every situation. The appropriate mechanism depends on the parties’ circumstances, the stage of the relationship and what they are trying to achieve. Separating couples should obtain legal advice about the available options before deciding how to formalise their financial arrangements.

How much does a Binding Financial Agreement cost?

There is no single cost that applies to every BFA. Legal fees can depend on the complexity of the parties’ financial circumstances, the number and type of assets involved, business interests, negotiations, amendments and the amount of legal work required.

When should I speak to binding financial agreement lawyers?

Ideally, obtain legal advice before signing or committing to the terms of a financial agreement. Early advice helps you understand the proposed agreement, identify concerns, and negotiate changes where appropriate.

Speak With Family Lawyers Mackay About Your Financial Agreement

A Binding Financial Agreement can be an important part of planning for your financial future. Still, its value depends on carefully considering and preparing the agreement under Australian family law.

Whether you are contemplating marriage, entering a de facto relationship, already married, separated, or reviewing an existing financial agreement, obtaining independent legal advice can help you understand your options before making an important decision.

If you are looking for binding financial agreement lawyers in Mackay, Family Lawyers Mackay can provide family law advice tailored to your circumstances.

Contact Family Lawyers Mackay to discuss your Binding Financial Agreement, property settlement or other family law concerns.

Read more related topics:

How do you divide property in a divorce

Lawyer for property settlement

Separation vs Divorce

4 Steps Property Settlement Process