GO TO
RELATED
Family Law
OUR PRACTICE AREAS
Wills & Estate Planning
Wills & Estate Disputes
Family Law
Commercial & Business Law
Property Law
Are you in a relationship where you and your partner are not on the same page regarding your finances? In that case, the seeds of conflict may find fertile ground.
Money management can be challenging for couples. Relationships can come under pressure when couples practice poor financial hygiene, have incompatible financial habits, or do not share the same financial goals.
Challenges can surface even before parties commit to one another as a couple. Where there is a disparity in financial contributions to a relationship, financial conflict may intensify. And the financial involvement of extended family members can add to the pressure.
An inability to have rational and honest conversations about money will likely put a significant strain on a relationship. Poor communication is often the precursor to relationship breakdown and divorce.
Many couples seek assurances regarding their futures should the relationship fail in the future. The potential for a dispute and separation can be reduced when both parties are clear on what will happen if the relationship does not endure.
A Binding Financial Agreement acts like an insurance policy and provides peace of mind regarding the financial future of each party. Such an agreement can improve the relationship by reducing the stress and uncertainty that would otherwise exist.
Our Toowoomba Family Law team, led by Murray Crawford, offers a confidential, fixed-fee appointment to provide the advice you need.
Contact CLO Lawyers Today to Enquire About Making a Financial Agreement.
It is mandatory to obtain independent legal advice before entering into a Binding Financial Agreement
Funding Options for Legal Fees
Want to keep your matter moving without paying everything upfront?
CLO Lawyers recommends JustFund for legal fee funding in property settlements.
Financial Agreements - Binding Financial Agreements (BFAs) and Prenuptial Agreements
Financial Agreements are also known as Binding Financial Agreements (BFAs) and Prenuptial Agreements. They are arrangements entered into by couples that outline what will happen regarding financial support (spousal maintenance) and/or property distribution if a relationship breaks down. They are contracts entered into by the parties concerning their property and finances.
A BFA can be made before formalising a relationship when parties are planning on being married, engaged, or intend to start a de facto relationship. The BFA entered into before marriage or de facto relationship is known as a prenuptial agreement (prenup).
Prenuptial agreements determine financial arrangements for a couple, including the distribution of assets, if the parties separate. They can be used to quarantine assets brought into a relationship by either party or to protect assets acquired by way of family gift or inheritance.
A BFA can be made during a relationship, setting out the financial arrangements between the parties in the event of a breakdown of the relationship. It can be used to quarantine assets.
Thirdly, a BFA can also be entered into following a separation or divorce to formalise the financial arrangements between the parties. If made after marriage, the BFA must be made within twelve months of an order of divorce.
A BFA enables a couple to enter into financial arrangements arising from their relationship in a way that ousts the jurisdiction of the Federal Circuit and Family Court of Australia (FCFCOA).
The BFA can deal with all the financial issues between the parties or deal only with specific issues, such as financial support or spousal maintenance.
It is mandatory to obtain independent legal advice before entering into a BFA.
Our Toowoomba Family Law team, led by Murray Crawford, offers a confidential, fixed-fee appointment to provide the advice you need for your financial protection. And we help you plan the way forward, given your unique circumstances.
Contact CLO Lawyers Now.
The Requirements for a BFA to be Binding on the Parties
A Binding Financial Agreement is not required to be registered or approved by a Court.
However, a Financial Agreement must meet specific technical requirements to be binding. These requirements are set out in sections 90G (for Financial Agreements about marriages) and 90UJ (for Financial Agreements about de facto relationships) of the Family Law Act 1975.
The legal provisions relating to a BFA are very complex. BFAs must be drafted carefully and make provision for existing corporate structures, such as family trusts, companies, and self-managed superannuation funds. Tax implications and other obligations must also be considered. It is vital to obtain advice from a family lawyer regarding the terms and ramifications of the Agreement.
Can A Binding Financial Agreement Be Set Aside Under The Family Law Act 1975?
The Federal Circuit and Family Court of Australia has the power to set aside BFAs in some circumstances. These are set out in sections 90K (for Financial Agreements about marriages) and 90UM (for Financial Agreements about de facto relationships) of the Family Law Act 1975.
A valid BFA can be set aside if any of the following are found to have occurred:
- The Agreement was obtained by fraud (for instance, there was a failure to make full or accurate financial disclosure when the BFA was signed).
- The Agreement was produced solely to defeat or defraud a creditor or with reckless disregard for the interests of a creditor.
- The Agreement is void, voidable, or unenforceable (in contract law).
- The Agreement is no longer practical due to a change in the circumstances.
- A material change has occurred relating to a child, resulting in hardship for the child or the other party if the Agreement is not set aside.
- In making the financial Agreement, the conduct of one of the parties was unconscionable.
- There are conditions regarding superannuation.
Termination of a Binding Financial Agreement
A BFA can be “terminated” in one of two ways:
- The parties enter into another BFA, provided that a specific provision terminating the former BFA is included in the new Agreement; or
- A “termination agreement” is entered into by the parties under section 90J (for married couples) or section 90UL (for de facto couples) of the Family Law Act 1975.
As with the original BFA, for a termination agreement to be binding and enforceable, it must be signed by the parties. In addition, each party must have received independent legal advice concerning the termination agreement.
What Is The Difference Between A Binding Financial Agreement And A Consent Order?
A BFA is a legally binding document that finalises the property and spouse maintenance matters arising from the relationship.
The BFA is not filed with the FCFCOA or considered by a Registrar or a Judge of the Court.
A BFA can document an arrangement that might not otherwise be ordered by a Court, subject to it being correctly drafted and executed with prior independent legal advice.
A property settlement or spouse maintenance arrangement between previously married or de facto couples can also be formalised by Consent Order. An application for consent orders and terms of consent orders (sometimes called minutes of consent, consent terms, or agreed orders) must be filed with and approved by the FCFCOA.
An application for consent orders filed with the FCFCOA will be considered by a Registrar. The property settlement must be regarded as just and equitable (fair) by the Registrar before the order can be made.
The circumstances of each couple will determine whether it is best to finalise financial arrangements using a BFA or Consent Order. A family lawyer should be consulted to determine the merits of the available options, given your unique situation.
Our family law team, led by Murray Crawford, offers a confidential, fixed-fee appointment to provide the advice you need for your financial protection. And we help you plan the way forward, given your unique circumstances. Contact us today using the enquiry form at the foot of this page.
Consult With An Experienced Family Lawyer To Obtain Legal Advice
It is crucial to get appropriate financial and legal advice as soon as difficulties arise in a relationship. Do not wait until there is a crisis to seek help. Obtaining legal and financial information regarding financial and property settlement issues will empower you to make better decisions for your future.
The end of a marriage or de facto relationship is painful and disruptive. And negotiating and finalising property settlement arrangements can be complex, time-consuming, and emotionally draining. However, most couples can reach a property settlement agreement with the assistance of legal and financial advisors and move on with their lives.
Entering into a BFA will ensure each party knows where they stand in the event of a separation, reducing the anxiety associated with the change in circumstances.
Our Toowoomba Family Law team, led by Murray Crawford, offers a confidential, fixed-fee appointment to provide the advice you need for your financial protection. And we help you plan the way forward, given your unique circumstances.
Contact CLO Lawyers Now.
Binding Financial Agreements FAQ: Frequently Asked Questions
Financial Agreements or Binding Financial Agreements (BFAs) and Prenuptial Agreements are private contracts between parties to a relationship. The agreements outline what will happen with financial support (spousal maintenance) and/or property distribution if their relationship breaks down.
A Prenuptial Agreement (prenup) is generally known as a Binding Financial Agreement (BFA) in Australia. It can be made before the existence of a marriage or de facto relationship, when parties are planning on being married, are engaged, or are planning to start a de facto relationship. They can be used to finalise financial arrangements between the parties, including the distribution of assets, if the parties separate. Prenuptial agreements can be used to quarantine assets brought into a relationship by either party or to protect assets acquired through a family gift or inheritance.
BFAs can be entered into by de facto or married couples. They can be entered into before the marriage or de facto relationship, during the relationship, or after the relationship breakdown.
BFAs are binding in Australia when they meet the technical requirements of the Family Law legislation. The requirements are set out in sections 90G (for Financial Agreements about marriages) and 90UJ (for Financial Agreements about de facto relationships) of the Family Law Act 1975.
It is mandatory to obtain independent legal advice before entering into a BFA.
To be binding, a Financial Agreement must meet specific technical requirements. These requirements are set out in sections 90G (for Financial Agreements about marriages) and 90UJ (for Financial Agreements about de facto relationships) of the Family Law Act 1975.
The legal provisions relating to a BFA are very complex. It is essential to obtain advice from a family lawyer regarding the terms and ramifications of the Agreement.
Prenuptial Agreements are a specific type of BFA that are entered into before the commencement of the de facto relationship or marriage. They are binding in Australia in circumstances where they meet the technical requirements of the Family Law legislation. The requirements are set out in sections 90G (for Financial Agreements about marriages) and 90UJ (for Financial Agreements about de facto relationships) of the Family Law Act 1975.
The cost of a BFA can be relatively modest if the parties are mainly in Agreement about the terms. However, the legal fees will vary depending on the time required to finalise the Agreement. This will include time spent obtaining details of the parties’ financial circumstances, drafting the Agreement, providing advice regarding the Agreement’s effect, and having the documents executed.
Where there is no BFA, the division of assets of the parties will be determined by the Family Law Act 1975. This is a process whereby the FCFCOA will consider various factors, including the financial and non-financial contributions of the parties made directly or indirectly to the property and financial resources of the parties. The Court will also consider the parties’ future financial needs, health, ability to obtain employment, and obligations to care for any children.
A Binding Financial Agreement (BFA), including a Prenuptial Agreement, is the only means in Australia by which the parties to a relationship can oust the jurisdiction of the FCFCOA. Without a BFA, the property division will be determined under the Family Law Act 1975.
The request for a BFA or prenuptial Agreement does not indicate a lack of trust. A BFA will give each party financial certainty in the future and enable the family to plan for all eventualities.