Binding Financial Agreements
When can I enter into a Binding Financial Agreement?
Binding Financial Agreements can be entered into before a marriage or relationship commencement, at any point during the marriage or relationship and after separation. By entering into a properly drafted and executed Binding Financial Agreement, it can prevent the Courts from interfering with agreed property and provide certainty at the time of the breakdown of any relationship.
How binding are these financial agreements?
To be binding, there are certain requirements that financial agreements need to meet, if they are not, then the agreement can be void or set aside. You must obtain independent legal advice and have a solicitor draft and execute the document to avoid the agreement being set aside.
What are the benefits of a Binding Financial Agreement?
By entering into a binding financial agreement you can avoid the unnecessary arguments over property taking place upon separation. It can also make parties feel secure knowing that the property they have accumulated prior the relationship or marriage is safe. The agreement will set out the agreement and it can be carried out without costly solicitor and court expenses.
Binding financial agreements deal with property, financial resources as well as maintenance:
- to protect existing assets or likely inheritances;
- to ensure that children of previous relationships inherit;
- to preserve family farms or other businesses for future generations;
- to give greater weight to the contribution of a higher income earner; or
- to avoid disputes about financial matters at the end of a relationship.
What is the process?
When looking to have a “BFA” drafted.
You are required to come in to the office for an initial consultation, this ensures that you completely understand the agreement that you are potentially entering into and the requirements, as well as the estimated costs of the binding financial agreement. Your estimated costs for the agreement will likely be no less than $2,500 plus GST.
After the agreement has been drafted, you will approve the document and it will be sent to the other party’s solicitors for them to obtain independent legal advice. At this point the other party’s solicitors may request further disclosure and could also request that there be some changes made to the document.
Once all the requirements have been satisfied then the document is executed.
When the BFA has been drafted already and you are looking for advice.
If a binding financial agreement has already been drafted and you require legal advice, you will need to come in to the office for your initial consultation and provide the solicitor with the drafted BFA. At that consultation you will receive advice on the agreement to ensure you understand your obligations in full. The agreement will not be signed at this consultation. After the consultation you will be sent a letter of advice which you are required to sign and send back prior to the agreement being executed. There are times where we require further disclosure and amendments made to the drafted agreement if it does not meet our standards to ensure its’ compliance.
Can my partner come along to the meetings?
This constitutes a conflict of interest and we cannot see both parties. We are required to provide independent legal advice to one party of the agreement.