A Binding Financial Agreement is a form of settlement agreement that sets out how property and superannuation is agreed to be divided. The Binding Financial Agreement provides for full and final settlement of all matters between separated spouses.
The Binding Financial Agreement can further be used as a form of what is more traditionally know as a prenuptial agreement or agreement during a relationship or marriage – that sets out how property should be divided in the event that parties become separated.
Our firm has drafted and advised into the hundreds of clients on Binding Financial Agreements, so we have a wealth of experience and we can provide to you assurance that not one of our agreements has ever been over-turned.
Our fees for drafting and advising you on a Binding Financial Agreement are fixed – that is, we will assess your circumstances and discuss with you the requirements of your Binding Financial Agreement for ‘no fee’then once we know the details we will provide to you a fixed price quotation for undertaking the work in preparing your Binding Financial Agreement and providing to you the advice required to make that agreement binding.
The requirements of a Binding Financial Agreement, are: –
• To make reference to the section of the Family Law Act that is relevant to your circumstances in the relationship or marriage at the time of entering into that agreement;
• Both parties sign the agreement;
• The parties each receive independent legal advice on the effect of the agreement;
• A separation declaration be signed to bring into effect the terms of the agreement;
• Include all property interests in the body of the agreement or schedule attached to the agreement.
A Binding Financial Agreement can only be varied by the parties making a further Binding Financial Agreement to replace, vary or terminate the original agreement or by order of the Family Courts setting aside the terms or part of the agreement.
Some tips for drafting a robust Binding Financial Agreement: –
• The more detailed and agreement, including accurate information the better;
• An agreement should provide for future events, such as what will change in the event of the birth of a child or ill health or one party;
• Make certain that each party receives truly independent legal advice from a solicitor, unfettered and free from influence by the other party to the agreement;
• An Australian Legal Practitioner (Solicitor admitted to practice in Australia) must provide the independent legal advice;
• Avoid signing up to a Binding Financial Agreement in circumstances were the ‘free agreement’ of one party may be bought into question, such as the day before a wedding or under threat such as ‘if you do not sign the agreement, I will not support your VISA or permanent residency application’;
• Structure asset holdings to prevent an intermingling of property interests to retain a clear division so that in the event of a separation the terms of the Binding Financial Agreement can be readily applied without complicated interpretation.
There are many benefits to entering into a Binding Financial Agreement that can save parties the cost of fighting in courts, incurring unnecessary legal costs and furthermore to provide to parties certainty into the future that their financial affairs are made final and no further claims can be made against them by the other party to the agreement.