Binding Financial Agreements

• How property or the financial resources of the parties is dealt with, in the event of a relationship breakdown;
• How the maintenance of either of the parties is dealt with, in the event of a relationship breakdown;
• Any other matter which has a ‘sufficient connection’ to property division or spousal maintenance.

BFAs are expensive documents for a number of reasons. The legislation regarding BFAs requires a number of formalities to be complied with for the BFA to be valid. These formalities are very strictly interpreted by the Family Court in the event of a dispute. The solicitor who drafts the BFA must ensure that it has been drafted accurately and correctly, noting that different sections and acts apply for different relationship situations.

The solicitor must also provide detailed written advice about the BFA; the advantages and disadvantages of making the agreement; and whether the parties would receive a better result through other means. This advice must be given to the other party, and sometimes annexed to the BFA itself.

Ensuring that all these bases are covered, that every i is dotted and every t crossed, means that BFAs can be far more expensive than simply getting a consent order.

The benefit of a BFA is that it gives more control to the parties, and can be entered into at any time in the relationship, whereas consent order applications are only available after the breakdown of a relationship.

• BFAs provide certainty about how assets will be split, in the event of a relationship breakdown.
• BFAs can save lengthy and costly litigation, if properly drafted & the parties have each received proper independent legal advice.
• Protects specific assets from being liquidated in the event of a separation

There is nothing in a BFA that can limit or exclude the power of the Family Court. Some examples of where the Family Court can set aside a BFA are:

• Where there is evidence of fraud, such as deliberate non-disclosure of a material asset, liability or other issue at the time of agreement;
• Where there is evidence of mistake, fraud, incapacity or a lack of genuine agreement from one or both parties; and
• Various other matters such as there being a lack of consideration, or public policy issues.
• The agreement was entered into with the intent to defraud or defeat a legitimate claim of a creditor to the party;
• Where one party uses undue influence to encourage the other to enter into the agreement;
• Where one party has acted unconscionably in relation to the agreement;
• Where the is evidence of mistake, fraud, incapacity or lack of genuine agreement from one or both parties; and
• Various other matters such as there being a lack of consideration or public policy issues.

BFAs are for parties who hold moderate to significant asset pools, and who wish to have certainty over dividing assets, in the event of a separation. BFAs can also provide protection for inherited wealth, such as protecting your family farm, or family business, if you decide to separate. Without a BFA, the assets brought by one party to the relationship can form part of the asset pool – and may be split between the parties in the event that the dispute goes to Court. 

Mossensons are able to review your situation, and advise you if a BFA is a viable and sensible option for you. If you are unsure whether a BFA is appropriate for you, give us a call and let us sit down with you to give you the best possible advice going forward.