After a separation or divorce, couples may need to decide on their property and financial arrangements and how they divide their assets.
Some couples decide this before they enter a relationship and formalise it in a Binding Financial Agreement (“BFA“), colloquially known as a pre-nuptial agreement.
In Australia a binding financial agreement is also used to document your property settlement if you end a marriage or de facto relationship.
This can be achieved through negotiation or mediation with the help of our family lawyers in Sydney, who can draft a suitable agreement. Both parties need independent legal advice on the binding financial agreement for it to be legally binding.
It is important to realise that a BFA is a contract between the parties that’s both binding and enforceable. It is a property and financial agreement and doesn’t include custody or parenting arrangements. BFAs can be made at any point in a relationship, including before cohabitation, during marriage, or after separation or divorce.
It is important after a relationship breaks down to get independent legal advice. It will help you separate fact from fiction and give you clear guidance on what is relevant to your situation. It is an important first step to ensuring you understand your entitlements and allow you to take a considered approach to your financial circumstances. Whether you are ending a marriage or a de facto relationship the legal principles remain similar with some variations.
When dividing assets, several factors should be taken into account, including:
The court looks at critical criteria when deciding on property settlements and these are differ depending on your relationship. It is important to understand the legal framework and how property settlement matters are decided so you understand your entitlements before signing a BFA.
A binding financial agreement (BFA) is a legal document detailing a property settlement and how assets are divided between parties. It typically includes a brief history of the relationship, the pre-relationship assets of each party, any assets obtained during the relationship and how the assets will be divided following separation.
To ensure a BFA is enforceable, it must be properly drafted to clearly define the terms and conditions of the settlement, including any superannuation splits and/or spousal maintenance payments. A poorly drafted BFA may not hold up in court, leading to legal complications.
If you are ending a relationship you may wish to apply for consent orders with the Federal Circuit and Family Court of Australia FCFCOA. A consent order carries more weight than just a BFA alone.
A Binding Financial Agreement offers several advantages over other methods of property settlement, including:
While a binding financial agreement offers clear benefits, there are also some potential drawbacks to consider. These include:
When separating or divorcing amicably, many people choose to enter into a binding financial agreement. However, it’s crucial that the agreement is carefully considered and drafted to ensure it’s enforceable if one party later changes their mind. You should also consider your own circumstances as they are costly to contest.
These agreements are complex legal documents, and they must be drafted correctly to prevent disputes from arising. Our family lawyers ensure that all legal documentation we prepare is clear and concise and can withstand the scrutiny of the family court.
For individuals with limited exposure to property settlements and negotiations, our legal practitioners can provide advice on binding financial agreements, property settlements and childrens matters. Using our extensive litigation experience, we can advise on what a court may view as fair.
If you have any queries or concerns, we can help by developing a plan that will help you achieve the outcomes you seek. We’ll also consider various alternative dispute resolution options and negotiation strategies. If a binding financial agreement isn’t suitable for your circumstances, we may alternatively recommend consent orders.
To speak to our binding financial agreement lawyers in Sydney about getting a BFA, call us on 1300 907 335 or complete our contact form below.
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