Different Types of Binding Financial Agreements

The Family Law Act allows married and de facto couples to enter into private agreements known as Binding Financial Agreements (BFA’s) that do not need the review of the Court. BFA’s can deal with how couples intend to divide their property and superannuation in the event of separation or after separation has occurred.

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 [2017] HCA 49.

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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.

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:

  • The agreement is in writing and signed by both parties;
  • The parties are contemplating entering a marriage or de facto relationship, are in a de facto relationship or marriage, have separated or divorced;
  • It includes a statement from each party to the agreement, before the agreement was signed that the party obtained independent legal advice on their rights and the advantages and disadvantages at the time that the advice was provided to the party of making the agreement;
  • Either before or after signing the agreement, each party was provided with a signed statement by a legal practitioner certifying that the advice with respect to the parties rights and advantages and disadvantages in entering the financial agreement was given;
  • A copy of the legal practitioner’s statement is given to the other party or a legal practitioner of the other party;
  • The agreement has not been terminated and has not been set aside by a court; and
  • Includes a separation declaration unless the agreement is signed post-divorce.

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It is important to lean on those closest to you to help deal with your feelings about your separation. It is also important to seek professional assistance through this process. Some key services include:

  • Family Relationship Centers
  • Reconciliation counselling
  • Separation counselling or mediation
  • Legal Advice from a Family Lawyer

At The Family Lawyer, we appreciate separation is a deeply difficult and confronting time. We take the time to listen and understand your circumstances, and provide you with advice regarding your family law issues.

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  • Post Separation Assets

Post Separation Assets

5 October 2021|

Post separation assets The date of separation, and therefore, the timing of a contribution to an asset made post-separation by one party, can be very relevant. A ‘post-separation contribution’ is a contribution made ...

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Frequently Asked Questions

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.

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. The circumstances in which a court may can be set aside a BFA are where:

  • There has been some dishonest conduct, such as material non-disclosure of assets;
  • The agreement is for an improper purpose, such as trying to defeat creditors;
  • The agreement does not comply with the Family Law Act 1975 and is defective; or
  • The circumstances have changed, which would make it unfair to hold the parties to what was agreed, for example if the couple has since had a child to whom care needs to be provided and the terms of the agreement does not reasonably allow the parties to adequately care for the child.

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.

Deciding on the terms to be included in your BFA is mostly up to the parties. However, a BFA can only cover financial matters.

This means that it cannot cover parenting arrangements (i.e. which parent a child lives with, visitation rights, etc.), and will be void to the extent that they attempt to cover those sorts of matters.

Child support payments and matters relating to the financial care of children can also not be dealt with through a BFA.

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.

The BFA can only be set aside in very limited circumstances pursuant to the provisions of the Family Law Act 1975. Therefore, you are contracting out of your right to have the Court determine your entitlement to property settlement.

There is no scrutiny of the agreement by the Court (i.e. to ensure it is just and equitable), and there is no process for registering the BFA with the Court.

If you need to enforce the BFA you must first apply to the Court for a declaration that the BFA is valid and enforceable.

Yes, both parties must receive independent legal advice from a practising solicitor in relation to the terms of the agreement.

The solicitors then need to provide each party with a certificate attesting that they have been provided independent legal advice.

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.

This means all assets, including real property, financial resources (shares, bitcoins etc.), contemplated inheritances, debts and superannuation entitlements, must be disclosed.

A BFA can be entered into either beforeduring 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.

While you can draft your own agreement, is not recommended. A BFA is a complex legal document that should be prepared by a lawyer to ensure it complies with the Family Law Act 1975. In addition, each party will still need to engage a solicitor for independent legal advice.

Hence it is often more cost-effective to get a solicitor involved at the outset.

What our clients say…

Thank you Kristdel for doing both our Wills, very professional, helpful, friendly and efficient. Highly recommended.

Linda

I highly recommend Kristdel for any family related matters. She is super responsive and helpful professional in all your family related requirements. I know her and the Family Lawyer firm for a long period now. And they are good partners to work with. Highly recommend.

Chamara

The team at the Family Lawyer were amazing. Kristdel was so calming and really helped me out during a hard and emotional time. She was upfront about how much everything was going to cost and kept things on track so it didn’t drag on. I don’t know where I would be without her. Thank you!

Kent

During this stressful time, I found Kristdel at The Family Lawyer to be particularly helpful. She demonstrated great empathy and responsiveness. She clearly outlined the options available to me, the pros and cons of each together with her final recommendation. As a result, I was confident that I was well informed and that she understood what was important to me. The issue was also resolved promptly and with a highly satisfactory outcome.

Matt

Thank you so much Kristdel! I was stressing about my separation and what it would involve and Kristdel could see I was very anxious so she let her black lab come into our consultation! It was so calming, I can’t thank you enough for being so empathetic.

Harleigh

Kristdel is an amazing lawyer. That’s the vibe I got, from the first initial call. Very happy with the service, very professional and prompt, no jargon, 100% committed to my needs. Quick to respond and very thoughtful.

The Local Gardener

Excellent service, they managed to show compassion for my stupidity, we laughed together

Elizabeth

Really happy with their service. Thank you.

Teodor

Kristdel helped with some much needed clarity in regards to financial obligations of a separation. Highly recommended

Simon

Friendly, professional and understanding staff. I was given great advice on what would be best to do in my situation and they handled it quickly, considered my wants/needs and made sure they were met and the whole process was stress-free. Couldn’t be more thankful for the great service.

Jaqcui

I had a really good experience the last few times I have visited their office. Great group of people to have on your side.

Sohail

Kristdel and the team have just helped me through a very difficult time. They were very professional, experienced and caring. I highly recommend The Family Lawyer.

Patrick

Extremely happy with the service I got, Christian was very professional and responsive he made sure everything was ready and nothing was left to chance. I got an outcome beyond what I expected!They were very accomodating with their fees.

Scott

What our clients say…

I had a really good experience the last few times I have visited their office. Great group of people to have on your side.

Sohail

I highly recommend Kristdel for any family related matters. She is super responsive and helpful professional in all your family related requirements. I know her and the Family Lawyer firm for a long period now. And they are good partners to work with. Highly recommend.

Chamara

Kristdel and the team have just helped me through a very difficult time. They were very professional, experienced and caring. I highly recommend The Family Lawyer.

Patrick

Friendly, professional and understanding staff. I was given great advice on what would be best to do in my situation and they handled it quickly, considered my wants/needs and made sure they were met and the whole process was stress-free. Couldn’t be more thankful for the great service.

Jaqcui

During this stressful time, I found Kristdel at The Family Lawyer to be particularly helpful. She demonstrated great empathy and responsiveness. She clearly outlined the options available to me, the pros and cons of each together with her final recommendation. As a result, I was confident that I was well informed and that she understood what was important to me. The issue was also resolved promptly and with a highly satisfactory outcome.

Matt

Really happy with their service. Thank you.

Teodor

Thank you Kristdel for doing both our Wills, very professional, helpful, friendly and efficient. Highly recommended.

Linda

Excellent service, they managed to show compassion for my stupidity, we laughed together

Elizabeth

Kristdel helped with some much needed clarity in regards to financial obligations of a separation. Highly recommended

Simon

Kristdel is an amazing lawyer. That’s the vibe I got, from the first initial call. Very happy with the service, very professional and prompt, no jargon, 100% committed to my needs. Quick to respond and very thoughtful.

The Local Gardener

Extremely happy with the service I got, Christian was very professional and responsive he made sure everything was ready and nothing was left to chance. I got an outcome beyond what I expected!They were very accomodating with their fees.

Scott

The team at the Family Lawyer were amazing. Kristdel was so calming and really helped me out during a hard and emotional time. She was upfront about how much everything was going to cost and kept things on track so it didn’t drag on. I don’t know where I would be without her. Thank you!

Kent

Thank you so much Kristdel! I was stressing about my separation and what it would involve and Kristdel could see I was very anxious so she let her black lab come into our consultation! It was so calming, I can’t thank you enough for being so empathetic.

Harleigh

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