Binding Financial Agreements (BFAs)
The Family Law Act (‘the Act’) provides for financial agreements, or ‘BFAs’ that can be made before, during or after marriage or after divorce. BFAs can also be made before, during or after the breakdown of a de facto relationship, including a relationship for same same-sex couples.
If you are presently living with someone (whether married or de facto), or if you are contemplating living with your partner (whether as a married or de facto couple), a binding financial agreement can be made to establish:
- How, in the event of the breakdown of the relationship, all or any of the property or financial resources of either or both parties, is to be dealt with; and
- The payments, if any, to be made for maintenance of the parties and their children during and/or after the marriage.
If you are separated or recently divorced, a binding financial agreement can be made as to how your property or financial resources acquired during the marriage are to be dealt with in the future and also as to the payment of maintenance.
The legal costs associated with the breakdown of a cohabitating relationship can be considerable, placing unnecessary financial strain upon parties at a difficult time. A binding financial agreement can be a very cost effective preventative measure to avoid such a burden. Also a BFA can assist you to avoid the payment of stamp duty in the transfer of property between parties to a relationship on the breakdown of that relationship, saving in many cases tens or hundreds of thousands of dollars.
The Court will uphold BFAs unless there are specific circumstances such as that the agreement was obtained by fraud, including non-disclosure of a material matter, or where there has been a material change in circumstances relating to the care, welfare and development of a child of the relationship and as a result the child or a party with caring responsibility for the child will suffer hardship if the agreement is not set aside.
To minimise the likelihood of the court determining that the agreement is unenforceable due to a change in circumstances it is advisable to include full details of the range of circumstances which have been contemplated by the parties prior to entering into the agreement. We recommend that before entering into a BFA you consider and discuss with your partner the numerous varied circumstances that you may face in the future including:
- the care of a child(ren);
- the purchase or sale of property;
- changes in residence;
- the merging of assets or the joint ownership or assets presently owned separately;
- the accrual or depletion of financial resources;
- the receipt of inheritances or gifts;
- changes in investments;
- your intentions for your estate upon your death.
We tailor all agreements to your particular circumstances, to minimise the possibility that your BFA could be challenged and set aside. We will provide you with sound advice on the legal ramifications of those varied circumstances prior to preparing your BFA. Provided that the legislative requirements and procedure for the giving of legal advice and execution of a financial agreement are met, the agreement will be enforceable.
Over recent years the specific legislative requirements have changed a number of times. For that reason is important to have your Binding Financial Agreement drafted by a legal practitioner experienced in family law matters – our Family Law team includes a number of Accredited Specialists in Family Law, and we constantly review legislation and case law to ensure that our BFAs are compliant with the current legislation and court decisions.