Binding Financial Agreements

A Binding Financial Agreements (“BFA”) is a legally enforceable agreement between a couple that outlines how their financial assets and responsibilities (both individual and joint) will be divided upon the breakdown of a marriage or de facto relationship.

You may have heard the term “pre-nup”, however Australian Legal Practitioners will almost always refer to these agreements as a BFA, and they are not limited to before a relationship begins, as a BFA can be entered into when you are contemplating cohabitation or marriage, during a marriage or relationship, or after separation.

These legally binding agreements are recognised by the Federal Circuit and Family Court of Australia (“Family Court”). They allow a couple to settle their property matters without the involvement of a Court, saving each party the expense of legal costs when separating, but also provide stability and avoid the significant stress of litigation.

There are many potential advantages to a BFA, which include:

• A BFA creates a degree of certainty as to what will happen with the couple’s asset should they separate (both individual and joint assets).
• To protect an individual’s assets held prior to the commencement of the relationship, in the event of separation.
• Even if a couple are amicable upon separation, it may save time as they have already agreed to how the assets will be divided, making it time-efficient.
• It gives a couple an opportunity to agree on the asset division while they are amicable.
• They are very customisable, each agreement drafted to suit the couple.
• They can be entered into at any stage of a relationship (when contemplating a relationship or marriage, during or after separation); and
• Allows a couple to a marriage or de facto relationship to agree to transfer property with the advantage of stamp duty exemptions (Financial Agreements under the part VIIIA of the Family Law Act 1975 are exempt for Duty under the Duties Act 1997 (Qld)).

It is still important to understand that a BFA can be set aside by the Family Court in certain circumstances, although obtaining thorough legal advice and the couple acting in a conscionable manner will substantially mitigate this risk (full financial disclosure exchanged and avoiding a situation where one parties is under duress).

It is important to note that a BFA does not deal with any matters relating to children, parenting or Child Support. Parenting agreements and Child Support agreements are separate agreements altogether and you should seek legal advice from your legal representative if you have concerns relating to the care of your children, co-parenting and/or Child Support after separation.

As always, you should always seek independent legal advice from an Australia Legal Practitioner about your specific circumstances and have a BFA drafted to suit your individual needs.

If you have any queries involving family-related disputes, telephone Solicitor Michael D’Enett at Croy Legal on 1300 123 876 or email [email protected]