A Binding Financial Agreement sets out how your assets and superannuation are to be handled if your relationship breaks down. It is generally available whether the relationship is a marriage or a de-facto relationship, whether before, during or after the duration of the relationship.
Typically, a family law property dispute can be resolved in one of the following ways:
- Entering into a Binding Financial Agreement;
- Applying for Consent Orders from the Family Court; or
- Commencing family law court proceedings – this is a last resort as it is potentially stressful and expensive.
Benefits of a Binding Financial Agreement
- It is a simpler and more cost-effective process than Consent Orders.
- Taken together with estate planning steps, can effectively to ensure your assets are passed on how you want.
Drawbacks of a Binding Financial Agreement
- Unlike Consent Orders, Binding Financial Agreements are not registered with the Court and are potentially more difficult to enforce.
- The law regarding when a Court may set aside a Binding Financial Agreement are complex.
A Binding Financial Agreement must comply with the Family Law Act to be legally binding. We often find downloaded or DIY agreements to be unsuited to a parties’ needs, or worse, not legally enforceable, and the parties have spent time or money for no benefit. In those cases, the usual benefits of a properly prepared Binding Financial Agreement are lost.
The typical process for a Binding Financial Agreement is:
- Negotiation – the parties negotiate and agree to a settlement.
- Drafting – the agreement is prepared according to what the parties agreed.
- Independent Legal Advice and signing – both parties must obtain legal advice regarding the effect of the agreement, and its advantages and disadvantages, before signing it. This is required for the agreement to be legally binding.
We can assist with all parts of this process.
Please contact us if you would like to negotiate a settlement with your former partner, or if you require advice on a Binding Financial Agreement.