Binding Financial Agreements.
Whether parties are married or in a de facto relationship, they have a right to enter into a legal agreement regarding their financial matters. A financial agreement, also known as a Binding Financial Agreement (BFA), can be made before (pre-nup), during, or on the breakdown of a relationship.
In order to make a financial agreement binding, there are strict rules that the Court requires parties to adhere to. Failure to do so can render your agreement invalid.
At Best Wilson Buckley Family Law, our Brisbane, Toowoomba, Ipswich & North Lakes family law specialists will ensure that you understand your legal rights and responsibilities and provide you with specific advice on how to protect them.
Financial agreements are effectively contracts that deal with financial matters arising from a relationship.
They can be made before, during, or after matrimonial or de facto relationships and can be known as pre-nup’s, planning financial agreement, co-habitation agreement, separation agreement or binding financial agreement.
In essence, a financial agreement is a legally recognised binding document which finalises the property and spouse maintenance matters arising from the relationship. The agreement is not filed with the Court or considered by a Registrar or a Judge. Provided the agreement is documented in the correct legal way with legal advice it can include an outcome or deal with matters that a court may not otherwise order.
The other way to legally document an agreement at the end of a de facto or matrimonial relationship is by an application for consent orders and terms of consent orders (sometimes called minutes of consent, consent terms, or agreed orders). An application for consent orders must be filed with the Court and is considered by a Registrar. The property settlement must be considered just and equitable (fair) by the Registrar before the order can be made. Parenting orders can also be included in a single application for consent orders which also includes property orders.
The reason why you would use one document over the other is specific to your circumstances and the agreement reached and are best discussed with your lawyer.
In order to be “binding”, a financial agreement must satisfy sections 90G and 90UJ of the family Law Act 1975. They also need to address the changing needs and circumstances over time for both parties.
There have been several court decisions that have set aside financial agreements for things like:
- lack of independent legal advice;
- inadequate legal advice;
- poorly prepared and executed agreements;
- lack of disclosure of financial information; and
- failure to comply with legislation.
To make sure your agreement ticks all of the boxes and complies with legislation you must have legal advice from your own solicitor. You should seek expert family law advice from someone that works in this area each and every day to make sure the Agreement has the best chance of success.
DIY financial agreement kits do exist. The question remains though as to whether you really want to attempt to protect your financial future, and that of your children, with a free template off the internet.
We can draft a financial agreement where you have reached agreement with your future or former partner. However, there is a legal requirement for you to both seek independent legal advice on that agreement and its implications for you. If we prepare the agreement on behalf of both of you we are not able to then provide independent advice to both parties. We can advise one party and refer your partner to our network of experienced family lawyers for that component.