What are Binding Financial Agreements (BFA)?
BFA’s are a great way to protect yourself and your loved ones. As you may know, the law can be confusing and complicated, so it’s important to have a lawyer who can help. A BFA is a legal document that outlines how much money each spouse will receive in case of divorce and other issues related to finances.
Introduction to a BFA
A BFA is a contract between two people who are in a relationship. It’s like a prenuptial agreement, but it can be used by anyone and doesn’t have to be done just before getting married.
A family law solicitor will help you draft up your binding financial agreement and make sure that it’s legally valid. The benefits of entering into one include:
● Protecting your assets from creditors if one partner gets into debt or stops paying their bills;
● Ensuring that both partners get what they’re entitled to should the relationship break down;
● Setting out how any future children will be cared for financially until they turn 18 years old (or 21 years old if they go on full-time study).
If you want to make sure that your assets are protected if you separate or divorce, then a BFA can be a good idea. It doesn’t have to be complicated and it’s easy to get started with one.
What is a Binding Financial Agreement?
A BFA is a written agreement between two people who are in a relationship and have separated or are about to separate. It sets out how they will divide their property, debts and assets; what financial support one person will pay the other; whether they should use the services of a mediator to help them reach an agreement; and any other matters agreed on by both parties.
A BFA can be made at any time during your relationship with your partner (but not while you’re still married). It’s important that you both understand what each party expects from this type of arrangement before signing anything as it could have serious consequences for both parties if there’s any misunderstanding later down the track when circumstances change unexpectedly. You should seek legal advice about a BFA before you sign it.
What are the benefits of entering into a Binding Financial Agreement?
In addition to helping you avoid the costs and stress of litigation, a Binding Financial Agreement can also help you prevent disputes between spouses. When parties enter into an agreement that details how they will divide their assets and debts in the event of a marriage breakdown, they have more certainty about what will happen in their future.
How do I enter into a Binding Financial Agreement?
A Binding Financial Agreement is a legal document that sets out how your property will be divided in the event of relationship breakdown. It can also cover other issues such as spousal maintenance (also known as alimony or spousal support), child support and parenting arrangements, if you have children together.
You and your partner should each discuss with your lawyers what matters most to you when it comes to property ownership and distribution in the event of relationship breakdown. Your lawyers will then prepare a draft BFA for both of you which reflects these discussions, so that each partner understands their rights and obligations under the agreement before they sign it.
What should I consider before entering into a BFA?
Before entering into a BFA, you should consider:
● If you are in a relationship with someone (including de facto relationships) and have children.
● If you have a business together.
● The assets that each party owns or is entitled to receive on death.
● Any property held by either party as trustee for another person’s benefit (such as an estate).
● Any superannuation funds held by either party for their own benefit or for the benefit of others (for example, their children).
Who can be an Solicitor for the parties to a BFA?
A solicitor is a lawyer who has been admitted to practice in the state or territory where you are signing your BFA. For example, if you live in NSW and want to enter into a BFA with someone who lives in Victoria, both parties must have solicitors who can legally represent them before signing any documents.
The solicitor must also be qualified and competent to advise on all aspects of family law including financial agreements. This means that they have completed relevant legal education (e.g., law degree), passed exams set by their governing body (e.g., Law Society), gained practical experience under supervision from an experienced practitioner (e Solicitor) and maintained this level over time through continuing professional development requirements such as Continuing Professional Education (CPD).
How Can I Use a BFA?
The Binding Financial Agreement is a great tool for anyone who wants to make sure that their financial arrangements are clear and agreed upon. It can be used in a variety of ways, including:
● Buying a house together
● Getting a loan or mortgage together
● Making important financial decisions like investing, buying property, starting businesses etc
It’s also a good idea to have an agreement if you share any kind of assets or property, even if you weren’t married. For example, if one partner receives money from an inheritance and uses it to buy a house together, then they should have a Co-Ownership Agreement to make sure that each person owns exactly half of the property.
Having your lawyer prepare an agreement will help you know what to expect in future.
Having your lawyer prepare an agreement will help you know what to expect in future.
● You can’t change your mind. Once the Financial Agreement is signed, it’s binding and enforceable by law. There are no second chances–the terms of the agreement must be followed as written or else there could be consequences including cost recovery or even jail time!
● You can’t change the agreement. Once signed by both parties, Financial Agreements cannot be changed without going back through court for another order that would amend (change) their original order(s). This means if one person wants something different than what was agreed upon at first then they need to go back through court again (and pay more money).
Financial Agreements are NOT a divorce. Even though they’re called “financial agreements” and they do involve the division of property, debts, etc., they aren’t actually divorces. They don’t end any marriage and are not considered legal separations or annulments either.
Disadvantages of a Binding Financial Agreement
Binding financial agreements, also known as prenuptial agreements or premarital agreements, have several potential disadvantages, including:
They can create a sense of mistrust or lack of commitment in the relationship.
They can be costly and time-consuming to draft and negotiate.
They may not be legally binding in certain situations or jurisdictions.
They can be challenged in court and may not be enforceable if certain conditions are not met, such as if the agreement was entered into under duress or if it is deemed to be unfair.
They can be emotionally difficult to discuss and negotiate, especially if one party is particularly resistant to the idea.
They may not be able to predict and provide for every possible future scenario.
It may not be able to cover certain aspect of divorce, like child custody or spousal support.
It’s important to note that each country laws might have a different approach and specific laws to binding financial agreements and have different process and criteria to be met. Therefore, it’s important to seek legal advice before entering into such agreements.
Consent Orders or BFA?
A binding financial agreement (BFA) is a legal document that outlines the terms and conditions of the financial arrangements between two parties, typically used in the context of a marriage or a de facto relationship. A content order, on the other hand, is a court order that sets out the terms of a financial settlement after a separation or divorce.
A BFA is a contract between the parties that is entered into before the relationship breaks down, while a content orders is made by the court after the relationship has ended. BFAs are intended to provide certainty and clarity about financial arrangements in the event of a separation or divorce and can be used to protect assets and income, while content orders are used to divide assets and make financial arrangements after a separation or divorce.
Both BFAs and content orders can cover a wide range of financial issues, including property division, spousal maintenance, and child support. It’s important to note that, while BFAs are legally binding, they may be challenged in court and may not be enforceable if certain conditions are not met, such as if the agreement was entered into under duress or if it is deemed to be unfair. Content orders, on the other hand, are enforceable by the court.
In summary, a BFA is a legally binding agreement that is entered into before a relationship breaks down, while a content order is a court order that is made after a relationship has ended. Both can cover a wide range of financial issues, but a BFA may not be enforceable in certain situations, while a content order is enforceable by the court.
Conclusion
We hope you’ve found this article helpful and informative. If you still have questions, please feel free to reach out to one of our family lawyers at Mediations Australia. We have a team of family lawyers and mediators who can assist you in Canberra, Perth, Adelaide, Melbourne, Sydney, and all other locations in Australia. Get legal advice from us today!
