Benefits of binding financial agreements

Couples can enter into a binding financial agreement (BFA) under the Family Law Act prior to marriage/de facto relationship. These agreements are commonly known as pre-nuptial agreements. Couples can also enter into a binding financial agreement during the marriage/de facto relationship or after the separation. In entering into a binding financial agreement you oust the property and maintenance provisions of the Family Law Act and pre-determine how you will distribute your assets in the event that your relationship breaks down.

 

 

Who would benefit from a Binding Financial Agreement?

People most likely to benefit from a financial agreement are:

  • Couples who are entering into a second or subsequent marriage or de facto relationship;
  • People with assets acquired prior to the relationship that they wish to protect;
  • Couples who want certainty as to ownership of discrete assets acquired during the relationship.
  • People who have children from a previous relationship and who want to protect their assets and provide for their children in the event of the breakdown of the marriage or relationship

What is the benefit of a Binding Financial Agreement?

There are numerous benefits to entering into a financial agreement and those benefits are as follows:

  • Provides certainty and peace of mind to couples in the event that their relationship breaks down.
  • Protects ownership of particular assets acquired prior to a relationship.
  • Enables clients to protect the ownership of discrete assets acquired during the relationship such as an inheritance or damages claim.
  • Couples avoid costly and lengthy litigation over matrimonial assets in the event of a relationship break down.
  • The financial agreement is binding on a person’s estate in the event of death.

What matters are included in a Binding Financial Agreement?

Financial agreements only deal with:

  • the ownership and/or distribution of a couples assets; and
  • spouse maintenance.

How is a Binding Financial Agreement binding?

A financial agreement is binding only when:

  • Each party obtains independent legal advice;
  • The agreement is in writing and signed by both parties;
  • The agreement contains a statement that each party has received independent legal advice;
  • Each party's solicitor signs a certificate of independent legal advice and annexes it to the agreement.

Somerville Legal holds regular lunchtime seminars on family law issues of property, parenting and divorce. Please click here to register for the next family law seminar.

 

For more information about a prenuptial or financial agreement contact Specialist Family Law Solicitors  Fiona Hoad, or Layla Doumit.

 

 

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