The Family Law Act allows parties to enter into an agreement in writing about their financial circumstances.
The agreements can be made before marriage, during a marriage, after separation or even after divorce.
If the Agreement complies with the legislation, the parties are prevented from seeking Orders in Court about the property covered by the Agreement. The agreement can also resolve Spousal Maintenance.
Binding Financial Agreements need not bind all of the property of the parties. They can be drawn to deal with selected assets only, for example, assets owned prior to the marriage, or specific classes of assets acquired during the marriage, or parties may agree to keep their inheritances separate.
Can a Binding Financial Agreement be set aside?
A Binding Financial Agreement is a contract which also complies with requirements set out in the Family Law Act. All contracts can be set aside if very specific circumstances exist. The Family Law Act also sets out particular circumstances under which a Binding Financial Agreement may be set aside. However, the agreement will not be set aside just because one of the persons who signed it now considers it to be unfair.
Why would I choose a Binding Financial Agreement to resolve financial issues?
Consent Orders, which are discussed in another FAQ, are normally made only after a marriage has ended. As against that, a Binding Financial Agreement may be entered into before a marriage ( a “Pre-Nup”) or in fact during or after a marriage.
A party might consider a Binding Financial Agreement:-
- To quarantine assets owned at the start of a relationship
- To quarantine specific or sentimental assets
- To provide for certainty
- To save the significant emotional and financial cost of disagreement if the marriage does not succeed
- To avoid appearances at Court
- To avoid disclosure of financial information in Court
- To obtain concessions from stamp duty and certain tax
- As “insurance”
Binding Financial Agreements are technical documents which require specific independent legal advice.
Prepared by Andrew Crooke
This publication has been carefully prepared, but it has been written in general terms and should be viewed as broad guidance only. It does not purport to be comprehensive or to render advice. No one should rely on the information contained in this publication without first obtaining professional advice relevant to their own specific situation.