Binding Financial Agreements (“BFAs”) deal with the property of a relationship. In practice, there are four types of BFAs, categorised according to their time of execution, namely, those:
1. Entered into before marriage (or before the commencement of a de facto relationship);
2. Entered into after marriage and before separation or divorce (or after the commencement of cohabitation for a de facto relationship);
3. Entered into after separation of the parties but before a divorce order is made; or
4. Entered into after a divorce order is made.
BFAs, provided they have been carefully drafted and validly executed, essentially oust the jurisdiction of the Court in relation to all property and financial matters.
BFAs are an alternative to obtaining Consent Orders in that they also formalise property matters following the breakdown of a marriage or de facto relationship. Unlike Consent Orders, however, the agreement is not submitted to the Family Court and the orders are not approved by the Court. Nevertheless, BFAs are legally binding on the parties to the agreement.
The requirements for a valid BFA are onerous. Significant expertise is required by the lawyer to satisfy his/her duty under the Family Law Act. Whatever you do, you should not retain a lawyer to draft or advise you on a BFA based on how much they charge. You must ensure they specialise in Family Law and have experience in drafting BFAs. Unfortunately, it is all too common that a BFA is set aside because of poor drafting or inaccurate advice.
Where parties choose to vary or terminate an existing BFA, at Taylor & Scott we can also prepare the necessary documents to ensure the enforceability of such arrangements.
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