When a couple decides to separate or divorce, they may need to reach an agreement regarding the division of their property and finances. This agreement can take the form of a separation agreement or a binding financial agreement under the Family Law Act 1975.
Binding Financial Agreement
A binding financial agreement, also known as a prenuptial agreement or a postnuptial agreement, is a legal document that sets out the financial arrangements between two parties in the event of separation or divorce. This agreement can cover the division of assets, property, and debts, spousal maintenance, and child support.
A binding financial agreement is a legally binding document that is enforceable in court. It can be used to prevent either party from making a claim on the other's property or assets in the event of separation or divorce.
A binding financial agreement can be entered into before, during, or after a marriage or de facto relationship. However, both parties must receive independent legal advice before signing the agreement, and the agreement must be drafted in accordance with the requirements of the Family Law Act 1975.
Requirements
To be a valid BFA, the following requirements, inter alia, must be met:
The agreement must be in writing and signed by all parties involved.
Each party must have received independent legal advice from a qualified lawyer about the effect of the agreement on their rights and the advantages and disadvantages of entering into the agreement.
A statement must be included in the agreement, signed by each party, that they have received legal advice before signing the agreement.
The agreement must not be entered into under duress, fraud, or undue influence.
The agreement must specify the relevant provisions of the Family Law Act that the parties seek to exclude or modify.
The agreement must be fair and reasonable at the time it was made.
The agreement must be certified by a legal practitioner as to the fact that independent legal advice was provided to each party and that they signed the agreement voluntarily and with full knowledge of its effect on their rights.
Once these requirements are met, the BFA will be binding on the parties, meaning that they will be legally obligated to follow its terms. It is important to note that a BFA can only be set aside by the court in limited circumstances, such as if there has been fraud or a material change in circumstances since the agreement was made.
Conclusion
If you are going through a separation or divorce in Australia, it is important to consider the options available for resolving financial and property matters. A separation agreement or a binding financial agreement can provide a flexible and effective way of reaching an agreement without going to court.
However, it is important to seek legal advice before entering into either agreement to ensure that the agreement is suitable for your situation and that your rights and interests are protected.
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This article contains information of a general nature only and is not specific to your circumstances. This is not legal advice and should not be relied upon without independent legal or financial advice, specific to your circumstances.