A prenuptial agreement, or binding financial agreement (BFA) in Australia, is an agreement that a couple makes either before moving in together, during the relationship, before marriage or during a marriage.
Requirements for a prenuptial agreement to be binding
For a prenuptial agreement to be binding, it has to meet strict criteria.
Criteria include (see the Family Law Act for the full list):
- The agreement has to be in writing.
- Each party has to obtain independent legal advice.
- The agreement must state under which section of the Act it is made.
What is the effect of a prenuptial agreement?
Once you have entered into the binding financial agreement, you are bound by what you have agreed to in the agreement if you separate.
Why have a prenuptial agreement?
The division of assets of parties at the end of a relationship can be extremely acrimonious. Parties can spend thousands of dollars on legal fees for family lawyers to fight on their behalf.
If you both agree on what should happen, a prenuptial agreement can give you certainty.
Can a prenup be set aside?
A party can apply to have the agreement set aside. Grounds to apply include:
- If the agreement was obtained by fraud (non disclosure of assets).
- If there has been a significant change in circumstances, such as the birth of a child and no provision was made in the agreement.
- If not all of the requirements of the prenuptial agreement were met, such as not obtaining independent legal advice.
- If there was unconscionable conduct during drafting/signing of the agreement (for example, signing on the day of the wedding).