Binding Financial Agreements

Types of Binding Financial Agreements

Binding Financial Agreements under the Family Law Act 1975 are categorised based on the timing of the agreement and the nature of the relationship. For married couples, section 90B agreements are made before marriage (commonly called prenuptial agreements or pre-nups), section 90C agreements are made during the marriage, and section 90D agreements are made after divorce. For de facto couples, the equivalent provisions are sections 90UC (before the de facto relationship), 90UD (during the de facto relationship), and 90UE (after the de facto relationship has broken down). Each type of agreement must meet the same core requirements for validity, but the timing affects what matters can be covered. Pre-relationship agreements can cover property division and spousal maintenance in the event of a breakdown, while agreements made during the relationship can address current and future financial arrangements. Post-separation agreements effectively operate as a private alternative to consent orders, allowing parties to finalise their property settlement without court involvement. It is important to choose the correct type of agreement for your circumstances, as an agreement made under the wrong provision may not be enforceable.

Requirements for a Valid Binding Financial Agreement

The requirements for a valid Binding Financial Agreement are set out in the Family Law Act 1975 and must be strictly complied with. First, the agreement must be in writing and signed by both parties. Second, each party must receive independent legal advice from a legal practitioner about the effect of the agreement on their rights and the advantages and disadvantages of entering into the agreement. Importantly, the advice must be independent — the same lawyer cannot advise both parties, and a lawyer who has a conflict of interest (for example, a lawyer who has previously acted for both parties in other matters) should not provide the advice. Third, the legal practitioner giving the advice must sign a certificate stating that they have provided the advice, and this certificate must be attached to the agreement or provided to the other party. The certificate serves as evidence that the requirement for independent legal advice has been met. The agreement must also specify how the property subject to the agreement will be dealt with. Since amendments to the Act, parties must also make a full and frank disclosure of their financial circumstances before entering into a BFA, although the exact requirements for disclosure may vary depending on the type of agreement and the circumstances of the parties.

When Can a Binding Financial Agreement Be Set Aside

While Binding Financial Agreements are designed to provide certainty, they can be set aside by a court in specific circumstances. The grounds for setting aside a BFA include: if the agreement was obtained by fraud, including non-disclosure of a material matter that a party knew about when the agreement was made; if the agreement is void, voidable, or unenforceable under general contract law principles (for example, if it was entered into under duress, undue influence, or as a result of unconscionable conduct); if a party has entered into the agreement to defraud or defeat the interests of a creditor; if there has been a material change in circumstances relating to the care, welfare, and development of a child that makes the agreement impractical or unfair; if a party (usually the party seeking to enforce the agreement) has behaved unconscionably in connection with the agreement; or if the agreement does not comply with the formal requirements set out in the Act. The court has broad discretion to set aside or vary an agreement if it would be unjust not to do so. If an agreement is set aside, the parties' property settlement rights revert to the standard position under the Family Law Act, and the court can make orders for property division as if the agreement never existed.

Binding Financial Agreements FAQs (Queensland Law)