Binding Fonancial Agreement

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What is a Binding Financial Agreement?

A Binding Financial Agreement, or “BFA”, is a legally binding agreement between a couple. It can be made before, during or after the de facto relationship or marriage.
A Binding Financial Agreement usually sets out what will happen to the couple’s individual and joint assets and liabilities if the couple separates, but it can also apply during a marriage.
For example, a Binding Financial Agreement can detail what happens with the income you and your spouse earn, who is responsible for paying the mortgage, rent or other expenses and what happens to any assets or debts you have now or accumulate in the future. A Binding Financial Agreement can even cater for certain events that could happen in the future such as if you have children or if one of you can no longer work.
For an agreement of this type to be binding, each party must receive independent legal advice before entering into the Binding Financial Agreement and complete a certificate stating that they have received this advice. Each party’s lawyers also need to complete a certificate stating that they have provided the necessary advice.

I’m thinking of getting married or starting a de facto relationship – should I get a Binding Financial Agreement?

You may consider making a Binding Financial Agreement before you enter into a de facto relationship or marriage. This is also known as a pre-nuptial agreement or “pre-nup”.
It is particularly important to consider entering into a Binding Financial Agreement if you own significant assets and want to protect these assets from a potential claim if the relationship breaks down. Without a Binding Financial Agreement in place, the assets that you have built up through a lifetime of hard work, or assets that have been generously provided to you by your family could be subject to a claim made by your partner/spouse if you separate.
If you have children from a previous relationship or marriage and you want to protect their interests, having an appropriate Binding Financial Agreement can help to ensure that your assets go to your children even if the current relationship breaks down.
No-one begins a relationship or marriage expecting that it will not last, but unfortunately separation is a reality faced by many couples. Therefore, it can be prudent to enter into a Binding Financial Agreement to protect your assets and avoid the costs and stress of a court case. Having a Binding Financial Agreement can give you peace of mind and clarity as to what will happen with your assets and finances if you and your spouse/partner separate.

I’m currently in a de facto relationship or marriage, can I still get a Binding Financial Agreement?

Even if you have already begun a de facto relationship or are already married, it is not too late to enter into a Binding Financial Agreement.

It is usually much easier, less stressful and cheaper for couples to make decisions about financial matters when the relationship is going well and communication is relatively easy. Therefore, if you are thinking of entering into a Binding Financial Agreement, it is better not to wait until things become rocky to make a Binding Financial Agreement. A Binding Financial Agreement could be a worthwhile investment, considering the potential cost, stress and emotional toll of being involved in court proceedings if the relationship breaks down and there is no Binding Financial Agreement in place.

What if I have already separated from my partner?

If you have already separated from your partner, you may want to make a Binding Financial Agreement as a way of having a legally binding property settlement with your ex-partner. This method of finalising a legally binding property settlement is different from having Consent Orders made, because it is a private agreement between a couple and does not need to be approved by the Court.

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