You’ve probably heard of “prenups” or “prenuptial agreements” before, perhaps in TV shows or movies. In Australia, these documents are commonly referred to as Binding Financial Agreements (BFA). A BFA often evokes mixed reactions, with misconceptions clouding their true purpose and utility. Let’s debunk some myths and unveil the essence of these agreements within the framework of the Family Law Act 1975 in Australia.
Contrary to popular belief, these agreements aren’t just for the ultra-wealthy; they serve as practical tools for any couple wishing to protect their individual interests and clarify financial matters. One prevailing myth suggests that BFAs signify a lack of trust or commitment in the relationship. On the contrary, discussing and creating a BFA can foster open communication and establish mutual understanding regarding financial expectations. Additionally, BFAs are often seen as safeguards against potential disputes, providing clarity and security for both parties.
Parties can enter into these agreements either before or during a relationship or after separation. They typically address key components such as asset division (inclusive of assets, liabilities and superannuation) and property rights and are tailored to suit each couple’s individual circumstances. With the above in mind, the parties may consider whether a BFA is suitable – or perhaps on the contrary, Consent Orders may be more suitable, but that’s a discussion for another day.
By dispelling misconceptions and understanding their purpose, couples can approach BFAs as practical tools for financial planning and relationship security.
If you and your ex-partner are considering entering into a BFA, please seek legal guidance as to whether this is the best course of action for you both, by contacting our family law team on 1300 285 888 to arrange a free initial consultation to discuss.
By Silvia Lee
