What are Binding Financial Agreements?
A Binding financial agreement is basically a contract between two people who are either in a marriage or defacto relationship which sets out a plan for the distribution of assets and property going forward. A Binding financial agreement can be made at any time between the two parties to a relationship like this by executing an agreement which is valid under Part IV of the Family Law Act 1975 (Cth). An agreement like this can be made before, after or during a marriage or defacto relationship and it can therefore function like a pre-nuptial agreement or a post-nuptial agreement depending on the circumstances.
What are the requirements for a Binding financial agreement?
A binding financial agreement will only be binding when all of the requirements which are used to establish them are created. A binding financial agreement requires a certificate of independent legal advice to be given by a legal practitioner for both parties stating that the lawyer giving the certificate has explained the full legal effect and consequences of the agreement to their client and that their client has fully understood these effect and consequences of the agreement. Also, under the Family Law Rules, both parties need to have made adequate disclosure of their true financial position in relation to the agreement to the other party. If it is later discovered that ‘full and frank’ disclosure was not given then the agreement can be set aside on the basis of this rule. In term of the documents which are normally included in a binding financial agreement, there are the schedules of assets which shows all of the assets of each of the parties that are covered by the agreement and there is the physical agreement itself which is used signed by both of the parties and is usually prepared by one of the lawyers for the party for one side and then there is a process of negotiation where the parties may request amends to the proposal which was given originally.
How can I get help with a binding financial agreement?
If your partner has asked you to sign a binding financial agreement or if you would like to get some advice on one or have one drafted, we have lawyers available online now to assist you with this. You can also post your question to our contact form or to our question box below.