What is a Binding Financial Agreement?
Binding Financial Agreements (BFAs) can be entered into at various stages of a relationship, each offering distinct benefits depending on the timing:
BEFORE MARRIAGE OR MOVING IN TOGETHER
Benefits: Provides clarity and certainty about financial arrangements, protects individual assets, and reduces the risk of disputes if the relationship ends.
DURING MARRIAGE OR A DE-FACTO RELATIONSHIP
Benefits: Helps manage finances and property transparently during the relationship, protects assets acquired individually, and offers a clear plan for asset division should the relationship break down.
AFTER SEPARATION OR DIVORCE
Benefits: Finalises financial arrangements and asset division flexibly and without Court proceedings, providing certainty and closure for both parties.
Fixed Fee Services
Need a Certificate of Independent Legal Advice for a Binding Financial Agreement? Ask about our Fixed Fee Services.
Have you been asked by the other party to sign a Binding Financial Agreement?
You may be asked to sign a BFA at the commencement of a relationship, such as before a marriage or after seperation to finalise the division of property.
A BFA must contain a certificate for each party, signed by their lawyer, certifying that both parties had legal advice about their rights, and the advantages and disadvantages of entering the agreement.
It is essential that you understand what the Binding Financial Agreement means for you, and how it protects your interests, so that you can make an informed choice about whether to sign it.
We can often provide you with a quotation for a Fixed Fee, for the service of reviewing the agreement, advising you on the contents (both verbally and in writing), and, if you decide to enter the agreement, we will sign the Certificate for Independent Legal Advice.
Contact us about our Fixed Fee Services for Binding Financial Agreements.
Frequently Asked Questions
Common questions about financial agreements.
Are Binding Financial Agreement’s enforceable?
Yes, Binding Financial Agreements can be enforced in the Courts if they are properly drafted and executed
How can I improve the likelihood that a Binding Financial Agreement will be accepted by my new partner?
There are some important matters to consider, which may make your BFA more likely to be acceptable to your partner:
- Consider discussing your reasons for the BFA in an honest, frank and specific way, and include discussion about how you propose the BFA to provide for your partner’s interests. For example, you may communicate concerns about your retirement or aged care plans, protecting the interests of children to previous relationships, or ensuring that your partner has immediate provision for their housing needs in the case of separation.
- Ensure that the proposed BFA is not one sided. A little compromise and provision for the future interests of your partner can lead to a better agreement in the long term.
- The provisions of the BFA should allow for your partner to build their financial interests, plan their future and benefit from any joint enterprise or property that they contribute towards.
- Consider incorporating provision in the BFA for changes according to the length of the relationship,
- Be honest and frank in disclosure about financial assets and liabilities.
Can a Binding Financial Agreement cover spousal maintenance?
Yes, a BFA can exclude, limit or reduce the risk of future claims for Spousal Maintenance, or provide provision for Spousal Maintenance in the case of separation.
Can a Binding Financial Agreement be challenged?
Yes, but in limited cases—e.g. factors that may support challenges to BFAs include fraud, failing to disclose material assets, duress or pressure to sign, reckless disregard for the interests people or companies who are owed money, changes in circumstances, excessive hardship, when it is impossible to perform the agreement or when the terms are uncertain.
It is important to get good advice about a BFA so that you can reduce the risk that a BFA will fail to protect your interests.
