What is a Binding Financial Agreement?
A BFA allows you and your partner to manage financial arrangements without going through the court system. Under the Family Law Act 1975, BFAs can address financial disputes and set terms for the division of assets, property, and even spousal maintenance.
By entering into a BFA, you are essentially contracting out of the Court’s jurisdiction in financial proceedings, meaning the court typically will not intervene unless the agreement is deemed invalid or is set aside under specific legal circumstances.
When Can You Enter into a BFA?
You can enter into a Binding Financial Agreement at the following stages
Before the marriage or de facto relationship (Section 90B or 90UB)
During the relationship (Section 90C or 90UC)
After separation or divorce (Section 90D or 90UD)
In all cases, it is mandatory that each party receives independent legal advice from separate legal practitioners before entering the agreement.
Is the Agreement Binding?
For a BFA to be legally binding, certain conditions must be met
The agreement must be in writing and signed by both parties.
A copy of the certificate from each party’s lawyer must be provided to the other party.
The agreement has not been terminated or set aside by a court.
Both parties must receive independent legal advice regarding their rights, and each lawyer must sign a certificate confirming the advice given.
If these steps are not followed, the agreement may not be enforceable.
Can a BFA Be Set Aside?
The Court has the power to set aside a BFA under certain circumstances, including
Fraud or non-disclosure
For example, if one party fails to disclose significant assets.
Unconscionable conduct
If one party took advantage of the other in an unfair or exploitative way.
Improper preparation:
If the agreement does not comply with the strict requirements of the Family Law Act.
Significant change in circumstances
Especially when related to the care and welfare of a child, causing one party to suffer hardship.
Terminating a BFA
A Binding Financial Agreement can be terminated by:
Entering a new financial agreement that explicitly terminates the original one.
Signing a separate termination agreement under the relevant section of the Family Law Act.
Both parties must receive independent legal advice before signing any termination documents.
Summary of the BFA Process
Discuss with Your Partner
Both parties must be willing to enter a Binding Financial Agreement.
Seek Independent Legal Advice
Each party must obtain advice from their own lawyer, explaining their rights and the advantages and disadvantages of entering into the agreement.
Draft the Agreement
A lawyer will prepare the agreement in accordance with the terms discussed by both parties, ensuring that all necessary legal requirements are met.
Review and Sign the Agreement
Each party reviews the agreement with their lawyer and signs it. A certificate confirming the legal advice is attached to the agreement.
Keep a Copy for Both Parties
Once signed, both parties should keep copies of the agreement and the legal certificates.
$99 Half-Hour Consultation
If you are considering a Binding Financial Agreement, contact us to book a 30-minute consultation for just $99. You can also reach us via phone or WhatsApp for more information.
