In this blog our family lawyers in Perth are going to explain what a binding financial agreement is, why you might consider getting one, and some of the benefits of having a binding financial agreement in place.
What Is A Binding Financial Agreement?
A binding financial agreement sets out what would happen to your finances (your own personal finances and all joint finances) in the event of a marriage or relationship breakdown.
These terms are jointly agreed by the two parties involved, e.g. you and your spouse/ex-spouse.
When Can I Get A Binding Financial Agreement?
A binding financial agreement can be drawn up at any point in your relationship.
They can be drawn up before you enter a marriage or de facto relationship, during your relationship or after the relationship has ended.
Previously, binding financial agreements drawn up prior to marriage were often referred to as prenuptial agreements.
What Are The Benefits Of A Binding Financial Agreement?
There are multiple benefits of putting a binding financial agreement in place.
- Making your own decisions about your finances (instead of leaving it for a judge to decide)
- Saving time and money on lengthy and potentially costly legal proceedings
- Maintaining a civil relationship with your ex-partner
- Keeping future disagreements to a minimum
Why Would I Need One?
If you want to protect your personal assets prior to entering a marriage or relationship (or during your marriage/relationship), you can have a binding financial agreement drawn up.
You can also have one drawn up once you have separated from your partner, to decide how to amicably split your financial assets. They can cover everything from financial settlements and superannuation entitlements to spousal maintenance, division of property as well any debts owed.
There can also be some advantages to having a binding financial agreement where you are worried that the Family Court might not approve the agreement that you and your ex-partner have reached.
If you want to avoid your financial future being decided by the Family Courts, a binding financial agreement allows you to come to mutually agreed decision on your finances with your spouse or ex instead.
Who Can Draw Up A Binding Financial Agreement?
Each party needs to engage a qualified family lawyer to draw up the binding financial agreement, as these cannot simply be decided between you and agreed in principle. To be binding, a lawyer for each party must be involved.
Both of you will need to receive independent legal advice before entering into any binding financial agreement. These lawyers with then complete a certificate of advice which forms part of the final agreement.
Can A Financial Agreement Be Set Aside?
Binding financial agreements are just that – binding. Each party must adhere to what it outlined in the document.
However, there are some exceptional circumstances when a financial agreement can be set aside by the court.
These include, but are not limited to:
- if the agreement was obtained fraudulently
- if a party entered the agreement with intent to defraud someone else
- if circumstances have changed which make the agreement impractical to carry out
- if since making the agreement, a party engaged in unconscionable behaviour
What Happens If We Can’t Agree On Property And Financial Matters?
If you are unable to mutually agree on your financial and/or property matters following a relationship breakdown, the only way to get a resolution will be to go to court and let a judge decide a fair outcome.
We offer free 15-minute phone consultations, so to discuss your situation in confidence with an experienced family lawyer in Perth, get in touch today.