Family Law: Binding Financial Agreements

No matter how blissful your relationship may be, it’s important to take measures that will 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 financial agreement. A Binding Financial Agreement is a legally-enforceable document that sets out monetary arrangements, such as property settlement and spousal maintenance, following separation between a married or de facto couple.

Due to the complexity of this contract, professional family law advice is highly encouraged to ensure all requirements are met. Our Financial Agreement Family Lawyers are here to help you formalise arrangements for peace of mind when it matters most.

 

Trusted legal advice for your financial agreement

 

Determining which type of financial agreement is most appropriate for your circumstances will require tailored legal advice that 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 dedicated family lawyers are available to advise you as to the fairest, most efficient and cost-effective manner to formalise its terms and conditions. We can provide you with fixed-fee estimates, independent legal counsel and support with property settlements after separation.

 

Meet our experienced team of Family Lawyers

 

At Affinitas Legal, we have extensive experience in advising on every aspect of the BFA process from drafting to termination. Our Family Law team will help you understand your legal situation so that you are empowered to make informed decisions that will protect you, your family and your future financial security.

 

Frequently asked questions

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.\

 

Are there time limits for entering into a Binding Financial Agreement?

 

You can enter into a BFA before, during or after your relationship.

 

When is a financial agreement binding?

 

A financial agreement is only binding if:

  • 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?

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 begun 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

 

Can a Binding Financial Agreement be overturned?

 

Yes. A Binding Financial Agreement 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 being 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 that 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.