Protect Your Future With a Binding Financial Agreement

What is a Binding Financial Agreement?

A BFA (Binding Financial Agreement) is a legally binding document which sets out what would happen to the couple’s finances and property, should the marriage or de facto relationship break down resulting in separation or divorce. It allows a couple to plan their future rights and responsibilities, before entering a marriage or even during or after, in the event of a substantial financial change. A BFA is not lodged with a court, but rather acts as a private contract between the parties.

Importantly, a BFA can protect assets including cash, property, superannuation or inheritances and are predominantly used for setting out the financial arrangements of the couple. However, a BFA does not cover child custody arrangements, nor child support payments. A more extensive discussion of which matters can be dealt with in a BFA can be found in our blog article about constructing, obtaining and setting aside Prenuptial Agreements.

Advantages of having a Binding Financial Agreement

Advantages of entering into a BFA include:

You have control of the outcome in the event of a breakdown of your relationship.
You know what to expect should the relationship breakdown with respect to a division of property.
You will save on the high costs associated with either negotiating a settlement after a separation or the commencement of proceedings if you cannot agree.
You have the benefit of reaching a workable outcome based on cooperation and negotiation agreed upon earlier on should the relationship break down.
It is easier to have a discussion about the division of assets in case the relationship breaks down while things are going well. A BFA can serve as a tool to reduce future conflict.
A Binding Financial Agreement can be a more cost-effective and a simpler solution than other settlement options. A BFA can save stress, time and cost.

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What does a Binding Financial Agreement cover?

A Binding Financial Agreement covers how the property or financial resources are to be dealt with in the event of the breakdown of the relationship.

For example:

Spousal maintenance (Financial Support)
Splitting assets and debts (Property Settlement)
Financial guarantees given
Division of superannuation
Division of finances
Tax liabilities
Matters related to family business

Why obtain legal assistance regarding your Binding Financial Agreement?

It is very important that your BFA meets the requirements set out in the Family Law Act. BFAs which are incorrectly drafted may be deemed invalid or set aside, but engaging an experienced solicitor will assist in this process.

Additionally, for a financial agreement to be binding, before it can be signed by both parties:

Each party must have received independent legal advice regarding the effect of the agreement on the rights of that party and the advantages and disadvantages of the agreement, at the time that the advice was provided to the party;
Each party must have received a signed statement from a legal practitioner as evidence that this advice has been provided; and
Each party must have received a copy of the equivalent legal advice signed by their spouse or intended spouse.

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The process for making a BFA

Our firm will make a detailed assessment of your financial situation based on the information provided by you in relation to your:

Living expenses
Tax returns
Assets (incl. superannuation and business assets)
Debts (incl. mortgages, credit cards)
Dependent’s expenses

The level of conflict and the complexity of your financial circumstances (and other circumstances) will dictate how quickly the BFA can be finalised. A Binding Financial Agreement when executed correctly, can allow for certainty, trust and peace of mind in a relationship. Our highly experienced family lawyers are here to assist in the process of negotiations and the drafting of your Binding Financial Agreement to ensure that your interests are fully protected.

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Etheringtons Solicitors have 35+years experience in preparing Binding Financial Agreements and Prenuptial Agreements.

Paul Etherington

Paul Etherington is the Principal and founder of Etheringtons Solicitors. In 1989 Paul commenced practising as a sole practitioner and with vision and strategy, the firm has grown to become a highly regarded legal practice, located at North Sydney.

Eleni Tsoromokos

Eleni Tsoromokos is a passionate and pragmatic family lawyer with experience in a wide range of divorce, property settlement, spousal maintenance and child support matters. She has extensive expertise in both parenting and financial matters. In parenting matters, Eleni’s experience ranges from facilitating and negotiating equal or substantial time arrangements to more complex matters such as Hague Convention (international child abduction) applications and child abuse and risk.

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