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Prenuptial Agreements Lawyer in Parramatta
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A Binding Financial Agreement (BFA) is a formal contract that couples can use to outline how their assets (including superannuation), debts, and financial resources will be divided if they separate, divorce, or their relationship ends.
It is also the type of agreement used by individuals who have already gone through a divorce or de facto property settlement to officially finalise the division of their asset pool.
There are three types of Binding Financial Agreements:
- Before Marriage or Defacto Relationship – what our friends in America call a “Prenuptial Agreement” and is entered into before the couple marry.
- During Marriage or Defacto Relationship.
- After Marriage or Defacto Relationship – after divorce or breakdown of the relationship.
Having a Binding Financial Agreement in place before a relationship breakdown offers significant benefits. By setting out ‘who gets what’ in advance, it eliminates the need for negotiation at a time when emotions are high and, crucially, helps avoid the need for court proceedings.
This proactive approach provides a clear plan from the outset. A Binding Financial Agreement enables many couples to finalise their financial arrangements without the added stress and expense often associated with property settlements following the end of a relationship.
What is Covered in a Binding Financial Agreement?
A Binding Financial Agreement outlines:
- The assets, liabilities, property, and superannuation held by both you and your partner or spouse.
- How these assets, liabilities, property, and superannuation will be divided between you.
- Spousal maintenance, which covers any financial support you may pay or receive if the relationship ends.
- Specific financial arrangements for child support, if applicable.
- Any other agreed-upon details, as advised by your family lawyer.
When Should You Consider a Binding Financial Agreement?
Having a family lawyer draft a Binding Financial Agreement can be advantageous for those who:
- Have significantly higher income and/or assets than their spouse or partner.
- Want to avoid the potential conflict, costs, and court battles that may arise.
- Wish to safeguard a future inheritance.
- Seek financial certainty regarding their and their partner’s financial positions in the event of a relationship breakdown.
An additional benefit of having a Binding Financial Agreement is that, in the event of separation, you can avoid paying stamp duty on property transfers and take advantage of Capital Gains Tax rollover relief.
Importantly, a Binding Financial Agreement can be revised and updated as needed, which is particularly useful if you have children or as your financial situation changes over time.
Finally, the contents of a Binding Financial Agreement are confidential to the parties. This is unlike a court application which is public.
Are Binding Financial Agreements Enforceable?
A Binding Financial Agreement is a legally enforceable contract recognised by the Federal Circuit and Family Court of Australia. This means both parties are required to comply with its terms, or the court can enforce them. It’s essential to engage an experienced family lawyer to draft this Agreement to reduce the risk of it being contested or deemed unenforceable.
A Binding Financial Agreement can be overturned or set aside in certain circumstances, such as:
Fraudulent Conduct: If the Agreement was obtained through deceit, such as failing to provide full and frank financial disclosure. For example, if Stephen and Sarah enter into a Binding Financial Agreement and Stephen does not disclose ownership of a secret property, Sarah can request the Federal Circuit and Family Court of Australia to set aside the Agreement due to Stephen’s lack of transparency.
Unconscionable Conduct: If one party used undue pressure, threats, or coercion to force the other party to sign. For example, if Anthony threatens to cancel his wedding to Tina unless she signs the Binding Financial Agreement, Tina may apply to the court to have the Agreement set aside.
Significant Change in Circumstances: If there is a material change in circumstances, particularly related to the care, welfare, and development of a child, that would cause hardship if the Agreement were enforced.
Defrauding Creditors: If the Agreement was made with the intention to defraud or defeat a creditor.
Failure to Meet Legal Requirements: If either party did not receive independent legal advice before signing the Agreement, it may be deemed invalid.
Lack of Capacity: If a person lacked the capacity to understand what they were agreeing to, due to factors such as an intellectual disability, being underage, or intoxication.
How Common Are Binding Financial Agreements?
It is increasingly common for couples to establish Binding Financial Agreements before getting married or entering into a committed de facto relationship. Those who have experienced the stress and emotional impact of divorce or property settlement know how taxing these processes can be. By having a Binding Financial Agreement in place, many of these challenges can be avoided, providing greater peace of mind and clarity for both parties.
How Long Do Binding Financial Agreements Last?
A financial agreement remains in effect indefinitely—even after one party passes away.
For prenuptial agreements, it is wise to include a clause allowing you and your partner to review and update the agreement every few years. This ensures that it reflects any changes in your personal and financial circumstances.
Without this flexibility, the financial agreement could become restrictive and may not suit your evolving situation.
What If My Partner Doesn’t Want To Sign The Agreement?
As mentioned earlier, you cannot force or pressure your spouse or partner into signing a Binding Financial Agreement.
It is important to encourage your partner to seek independent legal advice so they can make an informed decision. These agreements are not solely for those entering a relationship with greater wealth. A Binding Financial Agreement offers both parties certainty and clarity in the event of a relationship breakdown. It helps simplify the financial separation process, allowing you to focus on managing the non-financial aspects of the separation.
Before Signing A Prenuptial Agreement
It is a legal requirement to obtain independent legal advice before signing a Financial Agreement. Without this advice, the Binding Financial Agreement will not be enforceable.
At CK Lawyers, we assist clients with drafting initial Binding Financial Agreements, as well as reviewing and suggesting amendments to existing agreements. Our focus is on achieving an enforceable agreement that serves the best interests of our clients while ensuring it is fair for both parties.
Additionally, we provide the necessary certificate of independent legal advice as mandated by the Family Law Act.
Can I Use Online Binding Financial Agreements?
While downloading and filling out a template Prenuptial or Binding Financial Agreement from the internet may seem like a cost-effective option, these generic documents often fail to address your unique circumstances. If crucial details are missed, it can render the agreement unenforceable.
Even if you use an online template, you are still legally required to seek Independent Legal Advice from an Australian Legal Practitioner for the agreement to be considered “binding.” The legal practitioner will likely need to modify the template to ensure it is tailored and appropriate for your specific situation.
Your Trusted Family Lawyers in Parramatta and Western Sydney
Our family law team, led by Walid Joseph Kalouche, is distinctly qualified, highly experienced & intensely committed to your cause. We can provide advice and support across all aspects of family law.
Whether you and your former partner or spouse are amicable or in dispute, our family lawyers understand the gravity of what you are going through right now. Replace the uncertainty with clarity as you navigate your next steps.
The family law team at CK Lawyers in Parramatta is distinctly qualified, highly experienced & intensely committed to your cause. We have a proven history of successful outcomes through negotiation and advocacy, in and out of court.
