BINDING FINANCIAL AGREEMENT BEFORE DEFACTO

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A Binding Financial Agreement – before defacto is a financial agreement for parties who intend to move in together but have not done so yet.

Binding Financial Agreement defacto is an agreement between defacto, which means soon to be married or already married couples, which is made either before, during or after their relationship. Binding Financial Agreements can be made by same sex or opposite sex couples

14 pages long.

  • Separate property.
  • Joint property.
  • During the defacto relationship.
  • Separation.
  • Division of property in the event of breakdown of the defacto relationship.
  • Independent legal advice.
  • Taxes. 6
  • Claims for provision out of the estate of a deceased party.
  • Notices.
  • Governing law and jurisdiction.
  • Further assurance.
  • Execution page.
  • ANNEXURE A..
  • ANNEXURE B..
  • ANNEXURE C..
  • Statement under section 90UJ(1) of the (Binding Financial Agreement) Act 1975. 12
  • Separation declaration pursuant to section 90UF Act 1975. 14

 

includes gst.

  

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BFA BEFORE DEFACTO RELATIONSHIP
What is it?

A Binding Financial Agreement (BFA) before a de facto relationship is a legal document created under Australian law that outlines how assets, liabilities, and financial resources will be divided in the event of a relationship breakdown. These agreements are designed to provide clarity and certainty for both parties regarding their financial arrangements and to prevent disputes in the future.

Key Elements

Key Features of a Binding Financial Agreement

  1. Timing: A BFA can be made before, during, or after a de facto relationship. When made before the relationship, it is often referred to as a “prenup” or “pre-cohabitation agreement.”

  2. Legal Framework: In Australia, BFAs for de facto relationships are governed by the Family Law Act 1975. The agreement must comply with specific legal requirements to be binding and enforceable.

  3. Content of the Agreement:

    • Division of Assets and Liabilities: Specifies how property, assets, and liabilities will be divided if the relationship ends.
    • Spousal Maintenance: Addresses any spousal maintenance arrangements, including whether one party will provide financial support to the other and under what conditions.
    • Financial Resources: Details any other financial resources or entitlements, such as superannuation, and how they will be treated.
    • Debt Responsibility: Clarifies how debts incurred before or during the relationship will be handled.
  4. Legal Advice: Both parties must receive independent legal advice before signing the agreement. This ensures that each party understands the implications of the agreement and that their consent is informed and voluntary.

  5. Certification: The agreement must include a statement from each party’s lawyer confirming that they have provided independent legal advice regarding the advantages and disadvantages of the agreement.

  6. Formal Requirements: The BFA must be in writing and signed by both parties. It should also comply with any other formal requirements outlined in the Family Law Act.

Benefits of a Binding Financial Agreement

  1. Certainty and Clarity: Provides clear guidelines for the division of assets and financial arrangements, reducing uncertainty and potential disputes.
  2. Protection of Assets: Allows individuals to protect their assets, including those acquired before the relationship.
  3. Flexibility: Can be tailored to suit the specific needs and circumstances of the couple.
  4. Reduction of Stress and Conflict: Helps minimize conflict and stress if the relationship ends, as financial matters are already agreed upon.

Potential Issues and Considerations

  1. Changing Circumstances: The agreement may need to be reviewed and updated if there are significant changes in circumstances, such as the birth of children or substantial changes in financial status.
  2. Fairness and Enforceability: Courts can set aside a BFA if it is deemed unfair, fraudulent, or if it was signed under duress. Therefore, it is crucial that the agreement is fair and equitable.
  3. Independent Legal Advice: Both parties must have independent legal advice for the agreement to be enforceable, which can add to the initial cost of creating the agreement.

Steps to Create a Binding Financial Agreement

  1. Discuss and Negotiate Terms: The couple discusses and negotiates the terms of the agreement.
  2. Draft the Agreement: A lawyer drafts the BFA, ensuring it meets legal requirements.
  3. Independent Legal Advice: Each party seeks independent legal advice to understand the implications of the agreement.
  4. Sign and Certify: Both parties sign the agreement, and their lawyers provide certification of the independent legal advice.
  5. Review and Update: The agreement should be reviewed periodically and updated as necessary to reflect any changes in circumstances.

Creating a Binding Financial Agreement before a de facto relationship can provide significant benefits by establishing clear financial arrangements and protecting the interests of both parties.

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