Family Law: Binding Financial Agreements in WA

No matter how blissful your relationship is now, it’s important to take measures that protect your hard-earned assets in the event of separation.

While we all dream of happily ever after, sadly even the strongest relationships can break down. To avoid costly court proceedings and stressful disputes over who gets what, many couples enter into a Binding Financial Agreement in WA.

A Binding Financial Agreement (BFA) is a legally enforceable document that sets out monetary arrangements, such as property settlement, superannuation and spousal maintenance, following a separation between a married or de facto couple. Under the Family Law Act 1975 and Family Court Act 1997, a BFA can be entered into before, during or after a relationship.

Due to the complexity of this contract, both parties must obtain independent professional legal advice before signing. Our financial agreement lawyers are here to help you formalise arrangements for peace of mind when it matters most. Ensure your BFA is drafted to reflect your best interests from the outset.

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Protect your assets from future claims

A Binding Financial Agreement (BFA) is your shield against future claims if your relationship ends. Whether it covers all finances or just specific matters, a BFA safeguards your assets from property division claims in the Family Court and helps you steer clear of financial disputes post-separation.

  • A BFA can be structured to address:
  • How assets and finances will be divided if the relationship ends.
  • Whether one party will provide spousal maintenance during or after the marriage.
  • Any other financial matters related to the relationship.

To ensure the agreement holds up in court, both parties must fully disclose all assets, liabilities, and financial resources. Failure to do so risks the Family Court setting aside the agreement.

At Affinitas Legal, our family law solicitors can equip you with reliable legal advice and prepare a Binding Financial Agreement tailored to your needs.

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Trusted legal advice for your Binding Financial Agreement in WA

For a Binding Financial Agreement in WA to be legally binding, both parties must receive independent legal advice from a lawyer about how the agreement will affect their rights, along with the potential benefits and disadvantages at the time the advice is provided.

After all, the most appropriate type of financial agreement for your circumstances rests on the complexity of your asset pool, the proposed property division, and whether any time constraints exist.

Where a Binding Financial Agreement is the most suitable path for your unique situation, our experienced family lawyers in Perth will guide you through a fair, efficient, and cost-effective process to finalise the terms.

Receive a fixed-fee estimate, independent legal advice, and support with your property settlement after separation.

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Why enter into a Binding Financial Agreement?

Minimise uncertainty

Sorting out how assets and responsibilities will be divided early on can provide clarity on how assets will be handled if the relationship ends. Ultimately, this helps reduce stress during an already difficult time.

Stay amicable

Court proceedings during a divorce often turn hostile. By agreeing on the terms of separation beforehand, you have a better chance of keeping things civil and cooperative.

Prevent future disputes

Separation often brings about new disagreements. A written agreement provides evidence of what was agreed upon, making it harder to challenge later on. The legal nature of the agreement ensures both parties are bound to the terms.

Flexibility

A Binding Financial Agreement allows couples to tailor asset distribution to their specific needs. Together, you can decide how best to handle financial matters in case of separation.

Asset protection

In second or subsequent marriages, a BFA can ensure your assets are passed to your children. This protects your wealth from being claimed by a new spouse.

Cost-effective solution

Settling property matters through a Binding Financial Agreement in WA can prevent the need for costly court battles. It’s a more efficient way to resolve financial disputes after separation.

Speedy resolution

BFAs can be prepared and finalised faster than court orders. This means swifter resolution and less time waiting for legal approvals.

Achieve fairer outcomes

Creating a financial agreement during a positive phase of your relationship often leads to fairer and more balanced terms. This way, both parties are more likely to be satisfied with the final outcome.

Meet our experienced family lawyers

Our divorce lawyers in Perth have extensive experience in advising on every aspect of the BFA process, from drafting to termination.

We will help you understand your Family Law situation so that you are empowered to make informed decisions that will protect you, your family and your future financial security.

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Frequently asked questions

What is a Binding Financial Agreement?

A Binding Financial Agreement (BFA) is a legally binding private agreement that outlines how a couple will divide their assets and liabilities if their relationship ends. It’s a crucial tool for protecting your assets and ensuring you understand your rights and responsibilities during a separation.

A BFA helps you to:

  • Avoid potential conflicts over assets if you and your partner separate;
  • Establish clear guidelines for buying and owning property together;
  • Ensure your estate plans are aligned, so your assets are passed on according to your wishes; and
  • Save both time and money by reducing the risk of lengthy and costly legal battles after a relationship breakdown.

To make a BFA legally binding, both parties must seek independent legal advice before signing.

What is the difference between a Binding Financial Agreement and Consent Orders?

Financial settlements can be completed by entering into a Binding Financial Agreement or by way of Consent Orders.

While Binding Financial Agreements can be drafted without involving the Family Court, Consent Orders are made via an application to the Court and judicial determination that the arrangements are just and equitable.

What can a Binding Financial Agreement include?

A Binding Financial Agreement in Western Australia can outline how both current and future assets and liabilities will be handled. It may also address provisions for spousal maintenance.

It’s important to note that a BFA does not address parenting arrangements or child support.

Who can enter into a BFA?

Binding Financial Agreements apply to both married couples and de facto couples, who can enter into this arrangement before, during or after the relationship ends.

When can you enter into a Binding Financial Agreement?

You can enter into a financial agreement after separation, during your relationship or before you enter into the relationship.

BFAs are applicable to both de facto relationships and marriages, offering flexibility and protection tailored to your circumstances.

Should I enter into a Binding Financial Agreement?

You should consider getting a Binding Financial Agreement if you:

  • Have gone through the stress of a relationship breakdown or financial disputes in the past and want to avoid repeating the experience;
  • Have worked hard to build up significant assets and want to safeguard them in case the relationship doesn’t last;
  • Have inherited assets and wish to protect them in the event of a relationship breakdown;
  • Are starting a new relationship and want peace of mind about how things will be handled financially if it doesn’t work out; or
  • Are a parent who has provided substantial gifts or trust funds to your child and wants to ensure those contributions are protected if your relationship ends.

This legal agreement may also be beneficial if you and your partner:

  • Are planning to build financial assets together and want to ensure there’s a clear plan for how they’ll be divided if the relationship ends;
  • Are trying to make the relationship work but want a fallback agreement in place, just in case, to avoid disputes over assets;
  • Have separated but still find it advantageous to retain some joint assets while splitting others for mutual financial benefit; or
  • Want to keep the terms of your property settlement strictly confidential after separating.

When is a financial agreement binding?

For a Binding Financial Agreement in WA to be binding, it must comply with the following criteria set out in the Family Court Act 1997 and/or Family Law Act 1975:

  • The agreement is in the form of a written document signed by both parties
  • The parties are planning to be in, currently in or have been in a marital or de facto relationship with each other
  • Before signing the agreement, both parties include a statement declaring that they have obtained independent legal advice on their entitlements and the advantages and disadvantages of the agreement
  • Before or after signing the agreement, both parties receive a signed statement by both legal practitioners to confirm that this independent advice was solicited
  • It has not been terminated and set aside by the Family Court
  • It either contains a separation declaration or is signed by both parties after separation.

What are the advantages and disadvantages of a Binding Financial Agreement?

The advantages and disadvantages of a Binding Financial Agreement in WA are as follows:

Advantages

  • Certainty for both parties regarding property settlement and spousal maintenance rights in the event the relationship comes to an end
  • Parties can choose to forego the property settlement and spousal maintenance provisions set by the Family Court Act 1997 (WA) and Family Law Act 1975 (Cth)
  • Parties can avail of stamp duty exemptions on family transfers of real estate
  • Parties can save the time, money and stress involved in Family Court proceedings
  • Parties are permitted to exclude assets obtained before the relationship began from a property settlement
  • Agreement terms may be more beneficial than the potential outcome following Court proceedings

Disadvantages

  • There are a variety of grounds under which the agreement can be overturned
  • You cannot register this type of financial agreement at the Family Court
  • If a Binding Financial Agreement is already in place, there is little freedom or flexibility to negotiate property settlement once separation occurs.

How much does a Binding Financial Agreement in WA cost?

The cost of a Binding Financial Agreement in WA varies depending on your unique situation and what you’re aiming to achieve. Some BFAs are straightforward, while others require more intricate planning.

If your partner has limited financial resources, you may also need to budget for covering their independent legal advice costs.

In any case, the investment in drafting a BFA is far more cost-effective than going through lengthy and expensive litigation after a separation.

Can a Binding Financial Agreement be updated?

No, a Binding Financial Agreement (BFA) cannot be updated. The key is for this document to anticipate life’s twists and turns while remaining enforceable, even when unexpected changes come into play.

Therefore, to change the terms, the original agreement must be formally terminated, and a new one created. This process involves both parties obtaining independent legal advice.

To avoid this need, a BFA should be thoughtfully structured to factor in likely future events, such as the addition of children to the family.

Can a Binding Financial Agreement be overturned?

Yes. A Binding Financial Agreement in WA can be overturned if the Family Court deems it invalid and sets the document aside.

Find out the circumstances in which this outcome is possible at Section 90K (married couples) and Section 90UM (de facto couples) of the Family Law Act 1975.

Potential grounds for termination include:

  • Evidence of fraud, such as non-disclosure of assets
  • Evidence that one or both parties entered into the contract with the aim of defrauding a creditor
  • Evidence of engagement in unconscionable conduct while drafting the agreement
  • The agreement is drafted in a manner that renders it void, voidable or unenforceable
  • Changes in circumstances that make the agreement impractical or impossible to execute
  • Changes in circumstances relating to the care and welfare of a child of the relationship mean one party will be disadvantaged if the agreement remains in place.

What if we separate without a Binding Financial Agreement in place?

If your relationship breaks down and you do not have a valid Binding Financial Agreement in place, you can still enter into a legally enforceable arrangement within the permitted time frame.

Alternatively, you must negotiate a property settlement with your former partner before applying to the Family Court for Consent Orders.

If you action neither of the above legal processes, your financial security is at risk.

To safeguard your assets, please contact us for tailored support with your separation agreement.

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