Binding Financial Agreements
Often termed 'Binding Financial Agreements' (BFA's), these agreements can formalise a property settlement between separating parties, but are also flexible and can be entered into between the parties prior to (sometimes termed 'pre-nuptial agreements) or during a relationship/marriage in addition to after separation. These agreements do not need to be approved by the Court however each party to the agreement will need to obtain independent legal advice prior to entering into the agreement.
There are many reasons why people enter into these types of agreements and they cater for a range of circumstances and desired outcomes.
Commonly, a pre-nuptial agreement is entered into by parties who are entering into a domestic partnership or before they are married to determine how the property/assets of the relationship would be divided if the parties were to separate. It can also deal with spousal maintenance issued if required. These agreements can be particularly useful where one party enters into a relationship with significant assets, or there is a large income discrepancy between the parties.
When used after separation, the parties are able to formalise their property settlement without court intervention and allow the parties to move on with their lives.
Separated couples, (married or defacto) can avoid stamp duty payments when transferring property between themselves (whether it is for a house or investment property) if their property settlement is properly documented. Which means that getting this paperwork right can represent savings of tens of thousands of dollars.
To meet this requirement, the transfer of property involved in the property settlement, must be pursuant to a written agreement, either by way of Consent Orders or a Binding Financial Agreement. The document should clearly particularise any real property involved, including the provision of the lot, plan, county/parish and title reference information to ensure that an exemption is granted and there are no problems when the transfer documents are being lodged with the Department of Environment and Resource Management.
It is important when considering a property settlement, or when preparing to enter into a Binding Financial Agreement, that you obtain Family Law advice from a solicitor with extensive family law experience.
There are strict requirements laid out in the Family Law Act 1975 ('FLA') which must be met for the BFA to comply with the Act and be binding on the parties.
Significantly, each party will need to obtain their own independent legal advice as to the BFA, including, amongst other things, the effect of the agreement on that particular party's interest and personal circumstances.
It is important when considering a property settlement, or when preparing to enter into a Binding Financial Agreement, that you obtain Family Law advice from a solicitor with extensive family law experience as having a BFA prepared correctly from the outset can significantly reduce the risk of having to pay extensive legal costs to attempt to enforce a BFA which contains a technical breach of the FLA.
Affinity Family Lawyers can provide you with professional advice in relation to the drafting of a binding financial agreement, ensuring that the clauses within the agreement satisfy the requirements under the Family Law Act 1975 and ensure that the binding financial agreement correctly reflects your desired outcome. We will also ensure that you are aware of all of the possible outcomes and possibilities that may occur as a result of entering into a binding financial agreement.
Telephone to schedule your initial consultation with one of our experienced Family Lawyers, free of charge, today on 07 5563 8970.