The Family Law Act provides that individuals who are married or planning on marrying can enter into a Binding Financial Agreement at any of three different stages of their relationship:

(a) Before marriage (also known as pre nuptial agreements);
(b) During marriage but before Divorce; or
(c) After Divorce.

A Binding Financial Agreement (BFA) addresses the division of property and superannuation in the event of separation. It can also provide for the payment of spousal maintenance.

BFA’s exclude the jurisdiction of the Family Court save for applications to set them aside for fraud, duress or the like. They are contracts signed by each party which explicitly excludes the Family Court from make a decision regarding the division of their assets in the event of separation.

PRE NUPTIAL AGREEMENTS are available to couples who decide that they want to clarify the division of their assets prior to marriage. These agreements usually set out the assets and liabilities of the parties at or before the date of marriage, and how they seek their pre marriage assets are to be divided on separation. These types of agreement are common between parties where there is a significant disparity in personal wealth, second marriages or where the parties want to keep assets acquired prior to marriage separate to jointly acquired assets.

BINDING FINANCIAL AGREEMENT DURING MARRIAGE are for parties who are separated and prior to divorce enter into an agreement that sets out how they want to determine the division of their assets or for married couples who want to set out their financial rights and responsibilities in the event they were to separate in the future. The agreement can provide for a division of the superannuation of the parties, division of their non superannuation assets and any lump sum or periodic spousal maintenance. Care should be taken where superannuation is involved as there are requirements of the trustees to be met if the parties are seeking a splitting order.

BINDING FINANCIAL AGREEMENT FOLLOWING DIVORCE. A BFA can be entered into after the parties have obtained a Divorce. The matters dealt with in a BFA prepared following Divorce are identical to those dealt with in the second type of agreement set out above. Each party to the BFA must have obtained independent legal advice and the BFA must contain a certificate from a legal practitioner confirming that the practitioner has advised their client, independently of the other as to effect of the agreement on the rights of that party; and the advantages and disadvantages, at the time that the advice was provided, to the party of making the agreement.

The difference between a BFA and Consent Orders dealing with division of property is that the BFA does not need to be lodged with the Court for approval, and is not subject to review by the Court as to whether the BFA is just and equitable. A party may elect to enter into a BFA in preference to Consent Orders where their financial circumstances are complex, involving complicated company structures and taxation matters and to avoid the delay that may occur in obtaining orders in the Court.

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