What is the considerations before entering into Binding Financial Agreements?

Solicitors are required to advise the parties entering into a Financial Agreement on the advantages and disadvantages of entering into Binding Financial Agreements. The advice will need to be written and this is referred to as Independent Legal Advice. This means the parties can sign a certificate attached to the agreement that they have received this independent legal advice. The solicitors also sign certificates stating that they provided the advice required prior to the parties signing the agreement.

WHAT ARE THE ADVANTAGES OF ENTERING INTO A PRE-NUPTIAL, POST-NUP, OR BINDING FINANCIAL AGREEMENT?

1. A financial agreement does not become a court or public record. A financial agreement is not required to be filed even in the Family Court (that is Court in which a financial agreement may be challenged).n2. The parties can incorporate spousal maintenance terms into their financial agreement should there be a breakdown in their relationship and should the financial agreement come into force? The financial interests of the parties will be clearly defined in the agreement, however, a party may apply for spousal maintenance in special circumstances after separation even if there have been terms included in the financial agreement preventing the party from applying.

What do the provisions state for binding financial agreements in spousal maintenance?

1. No provision of a financial agreement excludes or limits the power of a court to make an order in relation to the maintenance of a party to a marriage or a de facto relationship if the court is satisfied that, when the agreement came into effect, the circumstances of the party were such that taking into account the terms and effect of the agreement, the party was unable to support himself or herself without an income-tested pension, allowance or benefit.n2. The assessment of the ability of a party to support themselves without an income-tested pension benefit takes place not when the agreement is made but when it takes effect.n3. Provisions can be incorporated into a financial agreement to determine the superannuation interests of the parties. That is pursuant to the terms of the agreement the parties can determine how their superannuation entitlements will be divided upon separation and when the agreement comes into effect.nnWhat are the disadvantages of having a Binding Financial Agreement?nThe parties to a financial agreement clearly define what will happen to their assets and liabilities if a separation should occur in their relationship. This separation may occur many years after the financial agreement is entered into.nnWhat are terms for Child Support and Child Maintenance in a Binding financial agreement?nIn regard to child maintenance or child support terms in a Binding Financial Agreement, terms can be inserted but such terms must meet the requirements of the Child Support (Assessment) Act. nEffectively a child support provision in a financial agreement can only set out on a temporary basis the child support obligations of a party to the agreement. Once a child support assessment is made by the Child Support Agency, any child support provision in a financial agreement ceases to have an effect and is unenforceable.nnWhat the legislation says about binding financial agreements?nThe Family Law Act 1975 sets out that a financial agreement will “end” under two circumstances. It can be either “terminated” under s90J or 90UL or “set aside” under s90K or 90UM. Termination is an action of the parties agree to undertake, however setting aside is an action of the Court. nA Court may set aside an agreement if it is “void, voidable or unenforceable”. If this ground is used, the parties or one of them may already consider that the agreement no longer operates. A party may apply to the court for an order that a financial agreement be set aside in circumstances where that party already believes that the contract has been rescinded, breached or is otherwise unenforceable.nnAre prenuptial agreements legally binding in Australia?nThe first thing is, are Prenuptial agreements legally enforceable?nYes, under section 90B of the Family law act 1975, Financial Agreement is the official name for a Prenuptial Agreement in Australia.nn

What are the disadvantages of having a Binding Financial Agreement?

The parties to a financial agreement clearly define what will happen to their assets and liabilities if a separation should occur in their relationship. This separation may occur many years after the financial agreement is entered into.

What are terms for Child Support and Child Maintenance in a Binding financial agreement?

In regard to child maintenance or child support terms in a Binding Financial Agreement, terms can be inserted but such terms must meet the requirements of the Child Support (Assessment) Act. nEffectively a child support provision in a financial agreement can only set out on a temporary basis the child support obligations of a party to the agreement. Once a child support assessment is made by the Child Support Agency, any child support provision in a financial agreement ceases to have an effect and is unenforceable.

What the legislation says about binding financial agreements?

The Family Law Act 1975 sets out that a financial agreement will “end” under two circumstances. It can be either “terminated” under s90J or 90UL or “set aside” under s90K or 90UM. Termination is an action of the parties agree to undertake, however setting aside is an action of the Court. nA Court may set aside an agreement if it is “void, voidable or unenforceable”. If this ground is used, the parties or one of them may already consider that the agreement no longer operates. A party may apply to the court for an order that a financial agreement be set aside in circumstances where that party already believes that the contract has been rescinded, breached or is otherwise unenforceable.

Are prenuptial agreements legally binding in Australia?

The first thing is, are Prenuptial agreements legally enforceable?nYes, under section 90B of the Family law act 1975, Financial Agreement is the official name for a Prenuptial Agreement in Australia.

LEGAL FINANCIAL SERVICES Archives

6 Sep 2016

PRENUPTIAL AGREEMENT AUSTRALIA (BFA)

James Noble

Understanding Prenuptial Agreement Australia and Binding Financial Agreements Prenuptial Agreement Australia (otherwise known as Binding Financial Agreements “BFA”’s) can be drawn up prior to, during or after a relationship/marriage. BFA’s set out how all or any assets or liabilities will be divided in the event of a breakdown of your relationship. This means that the assets and liabilities in the parties’ possession at the time of entering into the agreement can be accounted for and so can any accumulated during...

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