Sometimes it is said that love is blind – Binding Financial Agreement (BFA)

There is continuing controversy regarding the effectiveness of Binding Financial Agreements.

A financial agreement regulated according to the Family Law Act 1975 ("the Act") acts to effectively safeguard your assets either before, during or after a marriage or de facto relationship and removes those assets from the jurisdiction of the Federal Circuit and Family Court of Australia ("FCFCA").

A financial agreement is an agreement between the parties of a marriage or de fact relationship setting out how their assets will be divided in the event of a breakdown. The most common reasons people enter into such an agreement is:

1. To protect your assets in the event of any breakdown;
2. Where there is a blended family to provide clarity for any children from your prior relationships;
3. To provide a clear understanding between each other to prevent any future misunderstandings regarding your financial affairs;
4. To safeguard assets obtained prior to the commencement of the relationship.

It must be drafted carefully in accordance with the Act setting out a brief history of the relationship disclosing all assets of the parties with each party receiving legal advice from their own independent solicitor. The assets that need to be disclosed include:

1. Real property;
2. Share portfolios;
3. Cash deposits;
4. Motor vehicles;
5. High value belongings;
6. Superannuation; and
7. Interests in trusts and companies.

The FCFCA is a court of fairness where any application to vary starts from the position that a BFA is a binding contract, not to disturbed unless there are extenuating circumstances. Such circumstances would include whether the needs of the children of the relationship are properly provided, whether there is a special need of one party or whether fraud or coercion has resulted in the signing of the BFA.

I have assisted many clients to draft BFA’s to ensure sensitivity and compliance with legislation. Your BFA must faithfully reflect your situation and future financial position. If either you or anyone you know would like to discuss this matter, please do not hesitate in contacting me.

Have a wonderful day,

Regards,

Jeffrey
0419 233 670
[email protected]
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