Binding Financial Agreement: Everything you need to know

What are the benefits of a financial agreement?

Financial Agreements are important because they can help couples avoid costly and time-consuming legal disputes about money matters and abide by family law. They can also help ensure that each person’s financial interests are taken into account when a relationship ends. Financial Agreements can be tailored to meet the specific needs of each couple and can be amended or cancelled at any time if both parties agree.

There are many benefits to having a BFA, including:



• providing clarity and certainty about who owns what and who is responsible for what
• avoiding conflict about money and possessions
• saving time, stress and legal costs if a relationship breaks down.
• maintenance of the family law system

Who can qualify for a Financial Agreement?

Financial Agreements, very similar to prenuptial agreements, are legal agreements between couples that can be used to set out how they will handle their finances during and after their relationship. Financial Agreements can be made before, during, or after a relationship has ended, and can cover issues such as property ownership, asset division, spousal maintenance, and superannuation. Financial Agreements can be entered into by couples who are:

• Married
• intending to marry
• living in a de facto relationship
• have separated from a marriage or de facto relationship.

If you and your partner have already entered a BFA, it is important to seek legal advice from a qualified solicitor. This will help ensure that the existing financial agreement is legally binding and will protect your rights and interests.

When is a BFA recommended?

Couples often look at financial agreements in the following situations:

• When one party has considerably more assets than the other, an inheritance or a family business they have come into)
• When one party has significant obligations from which they wish to protect their spouse
• When stakeholders want to protect the business from marital disputes if one of the spouses are a significant part of this business
• When one of the spouses needs to provide for others and cannot risk tampering with a situation like that in case of a separation.

Steps to make a Financial Agreement in Australia

If you and your partner are considering entering into a BFA, there are a few things you need to do first.

1. Get legal advice

You must each get independent legal advice from a lawyer before you sign a BFA. This is so you understand what the agreement means and the consequences of signing it. This is also a legal requirement for the BFA to be legally binding under the Family Law Act.

2. Make a financial disclosure

Both parties must make full and frank financial disclosure. This means you must disclose all assets, liabilities, and resources. You must also disclose income, expenses, and debts. This is required so the parties are fully informed about the matrimonial property pool in the event of separation.

3. Draft the agreement

Your lawyer will help you draft the financial agreement. The agreement must include the following:

• The names and addresses of the parties involved
• The date the agreement was made
• Details of each party's assets and liabilities
• How the assets and liabilities will be divided
• Any other terms and conditions that need to be included

4. Sign the agreement

Once you have both agreed to the terms of the financial agreement, your lawyer will help you to sign it.

5. Independent Legal Advice

As stated above, each party to the financial agreement must have legal advice.  The legal advice must be independent by two separate lawyers.  Each lawyer must sign a certificate of independent legal advice contained in the BFA. 

If you follow these steps, this will help ensure that your BFA will be binding and enforceable in court.

Conclusion

No matter where in the world you are, it is important to have some kind of written agreement in place should you have a relationship breakdown. This will help to ensure that both parties are treated fairly and equitably during and after a divorce. While financial agreements may not be romantic, they can provide peace of mind during what can be a difficult time in the family court.



While prenuptial agreements are not legally required in Australia, they can be very helpful in safeguarding both parties during the marriage. If you are considering getting married, it is important to discuss financial agreements with your partner and seek someone to provide legal advice to ensure that you are protected in the event of a divorce.

FAQs

What should a binding Financial agreement in Australia include?

A binding financial agreement (BFA) is a written agreement under the Family Law Act, 1975 between two or more people that sets out how they will divide their property and finances if they separate. BFAs are commonly used in Australia to help couples avoid the cost and stress of going to court if they decide to break up.

There are a few things that every BFA must include in order to be legally binding:

1. The names of all the parties involved in the agreement
2. A statement that each party has received legal advice before signing the agreement
3. A full disclosure of each party's financial circumstances, including income, assets and debts to make the process of income and property settlement easier.
4. The terms of how the property and finances will be divided between the parties
5. The signatures of all the parties involved in the agreement

If you want your BFA to be legally binding, it's important to get independent legal advice before signing it. This means that each party has their own lawyer who can advise them on the implications of signing the agreement.

Can you write your own financial agreement in Australia?

Yes, you can write your own BFA in Australia. However, it is important to seek legal advice to ensure that the agreement is enforceable and meets your specific needs and those of the Family Law Act. A BFA can be a very effective way of ensuring that both parties are fairly compensated in the event of a breakup. It can also help to avoid costly legal disputes.

Since this is not an informal agreement, it is important to be aware of the following:



• The agreement must be in writing and signed by both parties
• The agreement must be fair and reasonable, and not unduly favour one party over another
• The agreement must be made without coercion or duress

Who signs a binding financial agreement in Australia?

Both parties to a marriage or de facto relationship can sign a binding financial agreement in Australia. However, it is important to note that the agreement must be signed by both parties before any property can be divided between them. If one party does not sign the agreement, then the other party will not be able to receive any of the benefits that were outlined in the agreement.

Do binding financial agreements expire in Australia?

No, binding financial agreements do not expire in Australia. They will continue to be binding until they are terminated or amended. This means that both parties must comply with the terms of the agreement, or they may face legal penalties. If you have any questions about your binding financial agreement, it is best to speak with a lawyer.

How does a binding financial agreement work in Australia?

When two people decide to get divorced, they will need to come to an agreement about how they will divide their assets. This can be a difficult process, and often requires the help of a lawyer. In some cases, the couple may choose to enter into a binding financial agreement.

A binding financial agreement is a legally binding contract that sets out how the couple will divide their assets. This can include property, money, investments and superannuation. The agreement can also cover issues such as child support and spousal maintenance.



The agreement must be fair to both parties and must be signed by both parties and their lawyers. Once it is signed, it is legally binding and can only be changed if both parties agree to it.

How do you get legally separated in QLD?

If you are considering a binding financial agreement Qld, it is important to understand the process and what is involved. In most cases, you will need to obtain a separation order from the Court.

The first step is to speak to a family lawyer who can advise you on your options and help you prepare the necessary paperwork. They can also help you to negotiate any financial or property settlements that need to be made.



If you and your spouse are able to come to an agreement about the terms of your separation, you can make a joint application to the Court. If there is disagreement, the Court will need to make a decision on the matter.

Can a binding financial agreement be challenged?

Yes, a binding financial agreement in Australia can be challenged. However, there are certain grounds on which an agreement can be challenged, such as if the agreement was entered into under duress or if it is unfair. If an agreement is successfully challenged, it may be set aside by the court.

What is a separation declaration?

A separation declaration is a document that is filed with the court by one or both spouses in order to begin the process of legally separating. This document outlines the grounds for separation, as well as any other relevant information pertaining to the couple's marriage. It is important to note that a separate declaration is different from a divorce decree, which is the final legal document that dissolves a marriage. A separation declaration is simply the first step in a longer process.