Binding Financial Agreement

A Binding Financial Agreement, also known as a prenuptial agreement or a financial separation agreement, is a legally binding contract made between two parties before, during, or after a marriage or de facto relationship. It outlines how the parties’ assets, debts, and financial resources will be divided in the event of a relationship breakdown or separation.

A Binding Financial Agreement is one of the options to ensure your assets remain protected in the event you separate. If there is no Financial Agreement in place, the Family Law Act have power to apply the very discretionary property adjustment regime, as well as the highly controversial rights to spousal maintenance. You can also use financial agreement to deal with issues such as spousal maintenance eg exempting each other from making a claim for maintenance, or specifying maintenance terms in the event of a separation. By entering a Financial Agreement, you and your partner effectively put aside the Family Law Act, and you have the chance to write your own rules about what will happen if your relationship ends.

For a Binding Financial Agreement to be legally enforceable, certain requirements must be met. These may vary depending on the jurisdiction, but typically include:

  1. The agreement must be in writing and signed by both parties.
  2. Each party must have received independent legal advice before signing the agreement. This means that each party must consult with their own lawyer who will provide advice on the effect and implications of the agreement.
  3. The agreement must include a statement from each party’s lawyer confirming that they provided advice.
  4. The agreement should not be obtained through fraud, duress, or undue influence.

It is essential that you work with an experienced lawyer to prepare your binding financial agreement. We are experienced in dealing with complex scenarios and the associated tax and property implications. To speak with us about drafting a legally binding prenuptial or de facto financial agreement, call 08 8234 5985.