BINDING FINANCIAL AGREEMENTS IN SYDNEY

A Binding Financial Agreement (BFA) is a legal document that outlines how property and financial resources will be divided in the event of separation. By signing a BFA, both parties waive the right to make future claims under the Family Law Act, and instead agree on a clear division of assets and financial matters.

A BFA is similar to a prenuptial agreement in the U.S., providing a pre-arranged plan for asset division if the relationship ends.

While the term ‘prenuptial agreement’ is widely known from TV and movies, in Australia, the equivalent is a Binding Financial Agreement. Like a prenuptial, a BFA can address asset division, including superannuation, but it’s regulated under Australian Family Law.

A BFA isn’t just for those planning to marry. It can be entered into before the relationship starts, during the relationship, or even after separation.

Yes, de facto couples, including same-sex couples, can enter into a BFA. It allows partners to agree on how assets will be divided in the event of separation.

For a BFA to be valid, it must meet specific legal requirements: it must be in writing, signed by both parties, and each must have received independent legal advice. If the agreement is not properly drafted or executed, it may be unenforceable and subject to being overturned by the court.

Yes. For a Binding Financial Agreement to be legally binding and enforceable, both parties must receive independent legal advice. Each party must consult their own lawyer, who will explain the agreement’s effect on their rights, as well as the potential advantages and disadvantages. The agreement must be voluntarily signed after each party has received proper advice, and once signed, it is legally binding.

A BFA provides certainty by clearly outlining how property will be divided if the relationship ends. It can protect assets acquired before the relationship, as well as potential future assets, such as inheritances. By agreeing to a BFA, you and your partner can avoid being bound by default Family Law provisions, as long as the agreement is not later set aside.

Technically, you can draft your own Binding Financial Agreement (BFA), but it’s not recommended.

A BFA must meet strict legal requirements under Australian law. According to the Family Law Act, both parties must receive independent legal advice before signing the agreement. This advice must cover the implications of the agreement on each party’s rights, as well as the advantages and disadvantages. Without this, the agreement is unlikely to be enforceable.

If a BFA is not properly drafted, it could be challenged in court, potentially leading to disputes, delays, and additional costs. Given the complexity of financial arrangements and the stakes involved, it's highly advisable to seek expert advice from experienced family lawyers at Kells to ensure your agreement complies with legal standards and fully protects your interests.

While Binding Financial Agreements (BFAs) are useful for protecting financial interests, poorly drafted agreements can face significant challenges. If a BFA fails to meet legal requirements, or if there was duress, non-disclosure of assets, or unfairness, the court may set it aside.

Additionally, BFAs may not account for future changes, like financial shifts or the birth of children, which could require revisiting the agreement. With expert legal guidance, these risks are greatly reduced, and the agreement will be fair and protective of both parties' rights.

A well-drafted BFA offers peace of mind and minimises risks, but it must be approached carefully, with appropriate legal support to avoid complications down the line.

The cost of a Binding Financial Agreement depends on the complexity of the case, the assets involved, and the negotiation required. Since both parties must seek independent legal advice, this also factors into the overall cost.

At Kells, we understand that cost is an important consideration. We strive to offer high-quality legal services while remaining affordable. Our team will provide a fair estimate based on your specific situation, so you can move forward with confidence, knowing you're receiving expert legal advice at a reasonable price.