There are many types of binding financial agreements or BFAs available to parties, allowing those involved to protect their resources in various scenarios. However, most people aren’t aware of what happens to a BFA if one party dies, along with the circumstances in which they can set aside an agreement.
BFAs are crucial for enabling parties to decide on how to deal with their assets, properties, and financial resources if they choose to separate. Couples can also include BFAs in spousal maintenance rights. Here’s what you need to know about BFAs in the event of the death of an involved party:
Will the BFA Continue After the Death of One Party?
Even when the BFA party passes away, the agreement will continue to operate as stated by section 90H of the Family Law Act 1975, also known as the Act. The contract will then work in favour of the deceased party’s personal representatives. It will also be binding on these individuals, who are responsible for fulfilling the agreement’s terms. A personal representative may be the executor named in the deceased party’s Will.
However, the situation is a bit tricky if you are the surviving party in the agreement. If none of the resources or assets is in your name or control, but the agreement declares that you are entitled to receive certain assets upon separation, then you’ll want a solicitor’s help. In this scenario, the Court must identify that the agreement is binding on your late partner’s representatives, in which Springfield solicitors can assist.
Meanwhile, if the Court sets the agreement aside and does not make orders regarding the property, then the Will distributes the assets accordingly.
Is It Possible to Challenge or Set Aside a BFA?
Thanks to the Act, it is possible to challenge financial agreements and have the Court set them aside. If they make an order that sets the agreement aside after an involved party’s death, it can be enforced on behalf of or against the deceased party’s estate. As a result, it will no longer be bound to the set terms in the BFA.
The Court will also have the power to transfer the property or make other orders to adjust to the rights and interests of the party.
There are many scenarios in which the Court can set aside a BFA, such as obtaining a BFA through fraud. This scenario often occurs when a material matter, like an inheritance or lottery win, is not disclosed in the agreement. The Court can also set aside the contract if there was a change in the relationship since the BFA’s creation, like the birth of a new child.
It’s essential to keep in mind that there are many other circumstances in which you can challenge or set aside a BFA, so it’s best to speak with family lawyers to find the best solution for your situation.
Binding Financial Agreements are serious commitments that you must carefully consider with a solicitor by your side. Without a careful inspection, it can result in undesirable consequences after you or your partner pass away. As it’s a complicated field in family law, you’ll want to consult with legal professionals to make sure that you’re fully aware of all the possible repercussions of the BFA.
Springfield Legals is a law firm specialising in family law, property and business conveyancing, and income protection and succession planning. Our legal experts provide specialist and tailored legal advice from individuals to large corporations. Contact us today to find out how we can help you!