Binding Financial Agreements
If you're separating or divorcing from your partner, a Binding Financial Agreement (BFA) can save you the cost and frustration of a protracted family law litigation.
A Binding Financial Agreement (BFA), also known as a pre-nuptial or post-nuptial agreement, is a contract between people in a relationship. It sets out the manner in which your property will be distributed if you get separated or divorced from your partner. BFAs are enforced just like a contract and have the ability to exclude the other party from commencing a court proceeding seeking a different outcome.
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BFAs are regulated by the Family Law Act 1975 and are only binding if:
They are signed by all parties
Before signing the agreement, each party has obtained independent legal advice and was provided with a signed statement from a lawyer certifying the same.
Types of Financial Agreements
There are three types of binding financial agreements provided for by the Family Law Act (FLA) which may be utilized by both married and de facto couples:
Financial agreements contemplating marriage (pre-nuptial agreements) — s 90B (s 90UB for de facto parties prior to cohabitation)
Financial agreements made during a marriage including where the parties are separated but not divorced — s 90C (s 90UC for de facto parties during cohabitation)
Financial agreements made after a divorce order has been made — s 90D (s 90UD for de facto parties after the de facto relationship has broken down).
For de facto agreements in Western Australia, see s 205ZN, FCA (agreements before beginning de facto relationship), s 205ZO, FCA (agreements during de facto relationship) and s 205ZP, FCA (agreements after the end of a de facto relationship).
Advantages of Financial Agreements
Flexibility: A financial agreement offers more flexibility than is usually provided by consent orders. Couples can agree on terms that suit their specific circumstances, such as how to divide assets, superannuation, and other property.
Cost: A financial agreement can be more cost-effective than going to court. Couples can avoid legal fees associated with court proceedings and resolve financial issues outside of court.
No Involvement of the Court: A financial agreement is a private agreement between the parties involved, and there is no involvement of the family law courts. This means that couples can avoid the delays and uncertainty that can be associated with court proceedings.
Stamp Duty Concessions: If the financial agreement is accompanied by a separation declaration and independent legal advice, it is equally effective in obtaining stamp duty concessions on the transfer of property between the parties.
Setting a Binding Financial Agreement Aside
Under section 90K of the Family Law Act 1975, the court has the power to set aside the BFA and make orders for a property settlement. This can include instances where:
The agreement was obtained by fraud (including non-disclosure of a material issue).
One party signed the agreement to defraud or defeat a creditor’s interest in the property
One party signed the agreement to defraud a de facto partner or to defeat the interests of the de facto partner under the Family Law Act, or with reckless disregard of those interests.
The agreement is void, voidable or unenforceable under the general law
One party engages in unconscionable conduct to enter the agreement
How Dhillon Legal Can Help
Dhillon Legal is a Melbourne family law firm with a team of experienced and dedicated lawyers. We can provide you with expert advice on binding financial agreements and other family law matters..Our family lawyers can help you:
Understand the Family Law Act and its implications for your specific case
Negotiate and mediate with the other party to reach an agreement that prioritizes your financial interests.
Contact Us
Protecting your financial interests requires expert legal representation. Contact Dhillon Legal today for a consultation with our experienced family lawyers in Melbourne.
