Binding Financial Agreements give couples in marriages and de facto relationships the flexibility to determine the split of property and financial arrangements at the end of a relationship without the involvement of the courts.
Our family lawyers in Perth and Joondalup can help you set up or review a Binding Financial Agreement.
What is a Binding Financial Agreement?
A Binding Financial Agreement is essentially a private contract that enables a couple to decide between themselves the division of assets if the relationship ends.
Binding Financial Agreements allow couples to deal with a range of property and financial matters and create certainty and security as to their financial relationship.
A Binding Financial Agreement signed before a marriage is also commonly referred to as a pre-nup or prenuptial agreement.
Why would I need a Binding Financial Agreement?
Having a Binding Financial Agreement gives you greater control and flexibility in determining financial arrangements in the event of a relationship breakdown.
Binding Financial Agreements prevent the Family Court from determining a property or financial dispute. This means the normal Court process will not apply, so the Court does not determine who gets what. With a Binding Financial Agreement you decide beforehand who gets what in the event of a split.
There are various personal reasons and circumstances in which you may want to protect your financial security with a Binding Financial Agreement. You may decide to get one if you:
- have children from a previous relationship
- have valuable assets you want to protect such as property and shares
- own your own business
- will receive a significant inheritance
- have relatives who are dependent on you
- are the beneficiary of a trust
What does a Binding Financial Agreement cover?
Binding Financial Agreements can cover a range of property and financial matters including:
- how property, finances and debt are dealt with when the relationship comes to an end;
- preserving assets, such as the family home for children;
- claims to inheritance;
- superannuation; and
- the payment of spousal maintenance.
When can I get a Binding Financial Agreement?
You can sign a Binding Financial Agreement before, during or after the breakdown of a marriage or de facto relationship.
If you do not have a Binding Financial Agreement in place, the Family Court will assess the assets, liabilities and financial resources of each party and will ensure that any settlement is just and equitable in accordance with the Family Law Act 1975 (Cth).
What are the advantages of a Binding Financial Agreement?
There are many advantages of a Binding Financial Agreement, including:
- Saving time and expense associated with Court proceedings and a trial.
- Providing certainty and security as to what will happen if the relationship ends.
- Protecting certain assets from future claims by a partner, such as inheritance.
- Preserving certain assets, for example the family home by keeping the property separate from any joint property so children can continue to live in the home.
Are there any disadvantages of a Binding Financial Agreement?
There are many reasons why someone may want to enter into a Binding Financial Agreement and it is important to understand what can go wrong.
When signing a Binding Financial Agreement, you should be aware of the following:
- There are technical requirements to ensure an agreement is valid and getting it wrong could invalidate it.
- The Family Court has the power to set aside a Binding Financial Agreement in certain circumstances including:
- if the agreement doesn’t meet the legal requirements and is unenforceable;
- a change in circumstances makes the agreement irrelevant; or
- financial hardship in certain circumstances.
- A Binding Financial Agreement can suggest a lack of trust or a lack of confidence in the relationship. Raising it with your partner may be difficult but in the long run will ensure your future financial security.
Where can I get a Binding Financial Agreement?
Our Perth and Joondalup family lawyers can provide the advice, support and guidance you need to set up a Binding Financial Agreement.
We take great care in both preparing and reviewing Binding Financial Agreements to ensure they meet all technical requirements so they are indeed binding and enforceable.
We will work closely with you to ensure your interests are protected.