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What is a binding financial agreement?
A Binding Financial Agreement or BFA is a private contract between two people who are or have been in a relationship, including same-sex partners.
The agreement sets out how assets including real property, superannuation and liabilities are distributed in the event of a breakdown of the relationship or marriage.
Different Types of binding financial agreements
There are different types of Binding Financial Agreements (BFA’s): –
- Financial Agreements before the relationship commences commonly known as ‘pre-nups’;
- Financial Agreements during relationships;
- Financial Agreements after the relationship has broken down effecting a property settlement; and
- Financial Agreements dealing with Spousal Support during or after the relationship.
If you are considering entering into a BFA before marriage, make sure you obtain legal advice well before your wedding.
It is important to leave sufficient time between formalising your agreement and the date of the wedding. A recent High Court decision has highlighted the risks of a BFA being signed too close to the wedding date, as it leaves “ink on the wedding dress” – see Thorne v Kennedy  HCA 49.
Child Support Aggreement
It is important to obtain independent legal advice before entering into a Child Support Agreement. Commonwealth child support laws are designed to ensure the interests and wellbeing of the child are met while balancing the capacity of parents to support their child. It is important that you consider all of your options carefully and obtain accurate legal advice about which scenario is best for you.
The type of child support arrangement you enter into will depend mainly on your financial circumstances, but also on how well both parties are able to negotiate the terms of child support.
Our Child Support Lawyers can help you achieve the best possible arrangements that benefit your child’s welfare.
requirements for a binding financial agreement
In order for your BFA to be enforceable, the following requirements must be met:
- Both you and your spouse / partner must have obtained independent legal advice prior to signing the agreement; and
- Both you and your spouse / partner must possess a certificate from your legal practitioner confirming that they have advised you independently as to the effect of the agreement on your rights and entitlements under the agreement, and the advantages and disadvantages of you entering into the agreement.
FURTHER requirements of a bINDING fINANCIAL aGREEMENT
The Family Law Act 1975 (Cth) has a number of other requirements that must be met before a Binding Financial Agreement becomes binding, such as:
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You have Questions. We have Answers.
Frequently asked questions
Yes, however, it is important to remember that once a BFA is entered into correctly, it will be considered binding, and having it set aside by a court (without the other party’s consent) is a difficult and expensive process.
A BFA made between de facto partners will cease to be binding if it is not made in contemplation of marriage, and the parties marry. You should advise your lawyer if you intend to get married so that the agreement can property drafted persist after your marriage.
Yes, full and frank disclosure is a key requirement that must be satisfied in order for the agreement to be legal and binding.
The parties must enter into the agreement of their own free will and be fully informed.
A BFA offers certainty for the finalisation of property matters in the event of a relationship breakdown and will avoid the considerable time, costs and risk in litigating the matter in Court.
The agreement will, as far as the law permits, protect you from future financial claims by your former spouse or partner.
A BFA can be entered into either before, during or after a marriage or de facto relationship.
Different sections of the Family Law Act 1975 apply to each scenario, and you should consult your solicitor for advice on the various circumstances.