Pre-nuptial agreements / prenups / binding financial agreements
In Western Australia couples have the option of making a binding financial agreement (or “BFA”) setting out how they want their assets and liabilities to be divided if they separate.
Where a valid, enforceable BFA is in place, a spouse can’t depart from that agreement at separation and go to the Family Court of WA for a “better deal”.
BFAs are therefore an excellent option for couples who wish to minimise the chance of an expensive and stressful court battle in the unfortunate event of separation.
BFAs can be made before marriage or cohabitation (a prenuptial agreement or “prenup”), during marriage or cohabitation, or after separation.
There are very strict formalities for a valid financial agreement. This includes a requirement that each party gets their own independent legal advice prior to entering the agreement.
I have encountered numerous clients who have made their own written agreements with their spouse, assuming that they would be binding in the Family Court, only to find that such agreements can be set aside because they were not made in accordance with the formal requirements of a binding financial agreement.
In addition to the formal requirements, BFAs may be set aside if:
it has become impractical to carry out the agreement due to a change in circumstance; or
there has been a material change in circumstance since the agreement was made, such that a child of the relationship or the primary carer would suffer hardship if the agreement were carried out.
Financial agreements therefore require careful thought and precise wording in order to reasonably account for the changes in circumstance that commonly arise during a marriage.
There are a number of other grounds on which a financial agreement may be set aside, so it is important to obtain legal advice when drafting a financial agreement.
If you would like some advice or information about making a binding financial agreement, please do not hesitate to contact East & Associates to arrange a free consultation.
Office address: 185 Railway Parade, Maylands WA 6051
Email: terrence@eastandassociates.com.au
Tel: 0403 632 777
