Binding Financial Agreement Lawyers

A Binding Financial Agreement (BFA) is a private, written agreement that sets out how property, financial support, and other financial arrangements will be handled between separating couples. It can be made before, during, or after a relationship and must be signed by both parties in the presence of an independent witness, such as a solicitor or Justice of the Peace.

Unlike consent orders, which are filed with the court, a BFA is a contract that operates outside of court proceedings, but it remains legally binding – provided that each party receives independent legal advice before signing. This advice must be documented by a signed statement confirming that you understand the nature and effect of the agreement.

There are different ways to divide assets after a relationship breaks down. Financial agreements are an excellent option for some and not ideal for others. It’s really important to seek legal advice to understand if they suit your specific circumstances.

A BFA can be ideal if you want to:

• Avoid the cost, delay, and publicity of court proceedings
• Have greater control over how your financial matters are resolved
• Protect assets from a family business or inheritance
• Clarify financial support obligations, such as spousal maintenance
• Formalise arrangements in a de facto relationship or same-sex partnership

A binding financial agreement can be a powerful way to protect your financial arrangements and avoid lengthy court proceedings, but it is not the right choice for everyone. The suitability of an BFA will depend on your relationship history, current assets, financial resources and the level of trust and transparency between you and your partner or former partner.

A BFA may not be suitable in cases where:

• There are significant power imbalances or duress that could affect whether the agreement is truly voluntary
• One party has not fully disclosed their financial resources, assets, or liabilities, which could make the agreement invalid
• There is ongoing family violence or any risk to the welfare, safety, or best interests of children
• Your financial circumstances or relationships are expected to change significantly, such as starting a family, selling a business, or receiving a large inheritance

In these situations, a binding financial agreement may not offer the protection you need, and alternative legal pathways such as consent orders or court proceedings might be more appropriate. Our experienced family lawyers will carefully assess your circumstances, outline the potential advantages and disadvantages, and provide expert advice on the best approach to protect your rights and financial future.

Our expert family lawyers will help you assess these factors, explain the advantages and disadvantages, and guide you through the best path forward.

A binding financial agreement is highly flexible and can be tailored to suit the specific circumstances of separating couples, de facto couples, or those entering a new relationship. It can deal with both immediate financial matters and arrangements for the future, providing clarity and certainty for both parties.

A BFA can cover:

• Division of current assets and property, including real estate, vehicles, personal possessions, and other valuable items
• Superannuation interests and other financial resources, ensuring retirement savings are addressed in a fair and transparent way
• Spousal maintenance or ongoing financial support, whether for a set period or until certain conditions are met
• Arrangements related to family businesses, trusts, or investments, protecting both the continuity of the business and individual entitlements
• Debts and liabilities, so there is a clear understanding of who is responsible for existing or future obligations
• Future financial arrangements, including provisions for creating a new financial agreement or making amendments to the original agreement at a later date

Because BFAs are legally binding under the Family Law Act, they must be carefully drafted to reflect your specific circumstances and goals. Being clear, thorough, and realistic in your agreement helps avoid misunderstandings, reduces the likelihood of disputes, and provides stronger protection if your financial circumstances or relationship status changes over time.

A binding financial agreement can provide strong legal protection, but it will only be effective if it meets the strict requirements set out under the Family Law Act. If these conditions are not met, the agreement may be challenged in court and set aside, leaving you exposed to further negotiations or proceedings.

To maximise the chances of your BFA being upheld, the following requirements must be met:

• Both parties must receive independent legal advice from experienced family lawyers, and this advice must be confirmed in a signed statement from the advising lawyer
• The agreement must be in writing and signed by both parties in front of a qualified witness, such as a solicitor or Justice of the Peace
• Full and frank disclosure of all financial circumstances, including assets, liabilities, and financial resources, must be provided by both parties
• The agreement must not be entered into under duress, undue influence, fraud, or unconscionable conduct
• The terms should be clear, fair, and consistent with the intentions of both parties, avoiding vague or ambiguous language that could create disputes later

Even with these safeguards, a BFA can be overturned in limited circumstances. For example, it may be set aside if it was obtained by fraud, if there was non-disclosure of material facts, if there has been a significant change in circumstances affecting the welfare of a child, or if the agreement is otherwise void, voidable, or unenforceable under contract law principles.

A Binding Financial Agreement (BFA) can be overturned in some circumstances. The parties to the BFA may overturn it themselves by entering into a Termination Agreement. A BFA may be overturned following an application being made to the Court in circumstances, including:

1. If the BFA was obtained by fraud, including non-disclosure of a material matter;
2. If circumstances that have arisen since the BFA was made make it impracticable for the Agreement or part of the Agreement to be carried out;
3. Since the making of the BFA, a material change in circumstance has occurred, being circumstances relating to the care, welfare and development of a child of the marriage, and as a result of the change, a party to the Agreement will suffer hardship if the Court does not set the Agreement aside;
4. The BFA relates to a superannuation interest which is an unsplittable interest.

If the following contractual principles apply:
(a) The Agreement is void, voidable or unenforceable;
(b) In respect of the making of a BFA, a party to the Agreement engaged in conduct that was in all the circumstances unconscionable.

The costs of preparing a Binding Financial Agreement (BFA) depend upon the complexity of your circumstances. One party usually bears the costs of having the BFA prepared, in addition to the legal fees associated with obtaining the compulsory legal advice. That leaves the other party responsible for the legal fees associated with receiving their own compulsory legal advice.