A Binding Financial Agreement (BFA) is a legally binding agreement between a married or de facto couple which sets out an agreement regarding their financial relationship. Like consent orders, a BFA can formalise an agreement in relation to property/financial separation or spousal maintenance.
Advantages of a BFA:
Entering into a BFA allows parties to make an agreement which would be more advantageous to one party than the Family Court would allow. Unlike consent orders, BFAs are not required to be just and equitable. A BFA is often favoured where one party is in a superior financial position and wishes to retain their assets.
Parties can contract out of the property settlement and spousal maintenance provisions provided in the relevant legislation.
BFA’s are not lodged at the Family Court and they remain private and confidential to the parties and their lawyers.
You may make a BFA before, during of even after a marriage or de facto relationship.
Disadvantages of a BFA:
It is a strict requirement that each party to a BFA obtains independent legal advice prior to signing a BFA. This requirement may make BFAs a more costly exercise than consent orders.
There are circumstances in which a BFA can be set aside by the Family Court. Therefore, there is no guarantee that the BFA will be binding.