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  • Writer's pictureDannielle Wright

What happens to a BFA after you die?

What is a Binding Financial Agreement?

Binding Financial Agreements (BFAs), also known as prenups or prenuptial agreements, are legal contracts that allow parties to determine how property and financial resources will be dealt with upon separation. BFAs can be entered into before, during, or after a marriage or de facto relationship.

 

Continuity of a BFA

When entering into a BFA, it is important to note that even after the death of one party, a BFA remains valid. With respect to section 90H of the Family Law Act 1975 (or section 90UK for de facto couples), the BFA will be binding upon the deceased's personal representatives. This means that the provisions regarding the distribution of assets in the BFA will remain in force, with the executor named in the Will typically acting as the personal representative.

 

Implications for surviving spouses

If you are the surviving party and the assets of the marriage or relationship are not owned in your name, but the BFA stipulates that you will receive certain assets or property upon separation, it is important to ensure that the BFA is valid, so the terms of the BFA are binding on your late spouses’ personal representatives. In the event that the Court sets aside the BFA and does not recognise the validity of the BFA, the deceased’s estate will be distributed in accordance with their Will, which may differ from provisions in the BFA. Alternatively, if your late spouse does not have a valid Will, their estate will be distributed in accordance with the legislation which may differ from the terms of the BFA.  Therefore, entering a BFA should be done with caution, as it can have unintended consequences following the passing of one spouse. 

 

If you need assistance in preparing a Binding Financial Agreement or require independent legal advice about your Binding Financial Agreement, please contact a member of our family law team today on (03) 9311 8911.

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