Binding Financial Agreement In Australia

If you are planning to have a BFA before the wedding, be sure to get a legal counselor well before your wedding. It is important to allow sufficient time between the formalization of your agreement and the date of the marriage. A recent High Court decision highlighted the risks of a BFA signing too close to the wedding date because it leaves “ink on the wedding dress” – see Thorne v Kennedy [2017] HCA 49. In the following video series, CGW family partner Justine Woods discusses what you need to know about binding financial arrangements for married and de facto couples, including the pros and cons, risks and potential flaws, and what the process will likely entail. This will save you time and money if you reach an agreement without going to court. You also know exactly what each of you will receive, whereas if you go to court, you are waiting for a judicial officer who decides for you. In addition, lengthy court proceedings can increase stress and increase the pressure you and your family are under. A recent decision by the High Court of Australia, known as Thorne/Kennedy, caused a stir in the press and in the legal fraternity because it was seen as the use in question of binding financial agreements, particularly what are commonly referred to as the “pre-marital agreements” Part VIIIA of the Family Law Act 1975 (Cth) is the place where you will find the legal provisions for binding financial agreements for married couples. Part 5A Division 3 of the Family Court Act 1997 (AV) for de facto couples in Western Australia. Part VIIIAB Division 4 of the Family Act 1975 (Cth) for de facto couples in other states and territories. The BFAs offer peace and protection to new couples before saying “I do” or establish a new de facto relationship. They are an indispensable instrument for financial and successor planning. To cancel a binding financial agreement, a party must ask the court to cancel the financial agreement.

When a binding financial agreement is repealed, the court has jurisdiction to order the accounting of property and/or the matrimonial support scheme, in accordance with the usual principles. These types of agreements are common for couples who enter into a second marriage or who have a fortune before marriage and wish to retain these assets as separate property. Some advantages of reaching a financial agreement are to have certainly and control your future financial situation, privacy before the usual court proceedings and the freedom to do things under the agreed terms. Financial arrangements can help foster a consensual and relatively rapid distribution of assets and liabilities following a breakdown of a relationship. If there is no BFA, each party can invoke its family law to go to the family courts. Without BFA and without an amicable agreement, their financial future is uncertain, as the family has a large margin of appreciation in financial affairs. Compelling financial agreements must be carefully developed to ensure that they take into account all structures such as family trusts, businesses and self-managed super-funds, as well as tax implications and other obligations. The discretion of the courts to repeal a binding financial agreement is relatively broad. Therefore, parties and their family lawyers who sign a binding financial agreement must be cautious when preparing and concluding a binding financial agreement. In the preparation of a binding financial agreement, one cannot “cut corners”. A binding financial agreement is sometimes called BFA. From financial agreements to marriage contracts to complex financial issues, our lawyers are experts on these issues.