A Binding Financial Agreement (BFA) is an agreement made between parties in a relationship – including same sex – which provides for the division of matrimonial assets and liabilities in the event of a separation. Types of BFAs include parties who are:
- In contemplation of a marriage (s90B);
- In contemplation of a de facto relationship (s90UB);
- During a marriage (s90C);
- During a de facto relationship (s90UC);
- After divorce (s90D); and
- After a breakdown of a de facto relationship (s90UD).
Besides addressing the division of matrimonial assets and liabilities, a BFA can also address issues of spousal maintenance (financial support from one spouse/de facto partner to another) and superannuation splitting.
BFAs however are not able to address issues of living and spend time arrangements regarding children, nor can they address child support issues. Parties would have to enter into a Parenting Plan, Consent Order and/or a Child Support Agreement for matters involving children and their maintenance. These are also agreements that Hassall’s Litigation Services can assist you with.
A BFA remains binding even after the death of one or both parties unless it has been set aside by a Court or terminated by the parties.
BFAs are made between the parties without the involvement of the Courts. This means that the parties, with the advice of their respective solicitors, are able to agree on a settlement without the approval of the Courts.
A BFA is binding if and only if the following legislative requirements are complied with:
- The agreement is signed by all parties; AND
- Before signing the agreement, each spouse party was provided with independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages (at the time that the advice was provided) to that party of making the agreement; AND
- Either before or after signing the agreement, each spouse party was provided with a signed statement by the legal practitioner stating that the advice was provided to that party (whether or not the statement is annexed to the agreement); AND
- A copy of the statement that was provided to a spouse party is given to the other spouse party or to a legal practitioner for the other spouse party; AND
- The agreement has not been terminated and has not been set aside by a Court.
A BFA can be terminated by the parties by:
- Executing a new BFA which includes a provision terminating the old BFA; OR
- Signing a Termination Agreement pursuant to the relevant sections of the Family Law Act 1975.
This article provides information that is general in nature and is not a substitute for legal advice.