BFAs are legally binding financial agreements. You use them to protect your assets when entering into a marriage or defacto relationship. The Family Law Act 1975 (Cth) details the rules for creating a legally valid BFA. This article will cover 5 crucial things you need to know before entering into a BFA.
1. Who Can Enter Into a BFA?
- Before marrying;
- Before living together;
- While married or living together;
- When separated, but not yet divorced;
- When divorced and separated.
You cannot use a foreign BFA. For the Australian Family Court to recognise your foreign one, you must create a new Australian one. The new one can have the same or similar terms, as long as both parties agree.
2. Different Forms for Different Purposes
Not every BFA is the same. Your BFA will depend on your relationship. Using the wrong one will invalidate it. You need to know which one to use before creating one. These BFAs include:
- Pre-nuptial Agreements– for agreements made before intended marriage;
- Post-nuptial Agreements– used for couples already married;
- Cohabitation Agreement– for partners intending to live together, but who are not married;
- Separation Agreement– used before divorce or instead of a divorce agreement;
- Divorce Agreement– it includes the divorce terms and finalises everything.
BFAs have specific requirements. The Family Law Act 1975 (Cth) lists these under section 90G. These requirements include:
- Agreement must be signed by all parties;
- Each spouse or partner must seek independent legal advice;
- Lawyers must provide a written statement confirming that legal advice was given;
- Both parties must exchange these written statements;
- The Court must not have set aside the BFA.
4. Can It Be Enforced?
BFAs that follow the statutory requirements will generally be enforceable. However, there are two situations when they will not:
For example, the primary carer will likely be able to stay in the house, if that is where the children are.
- BFA terms entered into under duress will be invalidated;
For example, if one party threatens the other party to sign the BFA, which includes threatening not to marry right before the wedding, this can count as duress.
5. When Should You Use One?
If you independently own valuable assets then a BFA is for you. It is also useful for people with children from a previous marriage or partnership. This can include:
- Real Estate;
- Family trust property;
- Company or business ownership;
- Expected future inheritance of value.
If you do not have valuable assets, then perhaps a BFA is not suitable. Regardless, you can enter into a one at any stage of your relationship, so although it may not be right now, it may be right later.
BFAs need not put a strain on your relationship. In fact, they can save you from the stress and uncertainty that accompany relationship breakdowns. However, they are not for everyone.
Want to know more? Contact a LawPath consultant on 1800 529 728 to learn more about BFAs and obtaining a fixed-fee quote from Australia’s largest legal marketplace.