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GJA Law – Sydney’s Trusted Binding Financial Agreement Lawyers

Binding Financial Agreements in Sydney

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In an era of increasingly complex financial lives and blended families, the desire for certainty and protection in personal relationships has never been greater. For couples in Sydney—whether marrying, entering a de facto relationship, or navigating a separation—a Binding Financial Agreement (BFA) offers a powerful legal tool to define financial futures proactively.

At GJA Law, we specialise in crafting these bespoke agreements, providing our clients with clarity, security, and peace of mind. This guide delves into the intricacies of BFAs, empowering you with the knowledge to make informed decisions about protecting your assets and your future.

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    What Is Binding Financial Agreements?

    A Binding Financial Agreement is a legally enforceable contract made under the Family Law Act 1975 (Cth). It allows two parties in a relationship to agree, in advance, on how their assets, financial resources, and liabilities will be divided in the event of a separation, without the need for court intervention. Importantly, a BFA can also govern financial arrangements during the relationship.

    Think of it as a tailored financial roadmap for your relationship’s potential dissolution. It overrides the default property settlement provisions of the Family Law Act, providing a pre-determined outcome. A BFA is not a sign of distrust; rather, it is a practical exercise in financial transparency and planning, often likened to an insurance policy that everyone hopes never to use but values for the security it provides.

    • Fantastic service. Always honest and clear in the advice being given. I have recommended others to GJA and will continue to do so.

      Rachel


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    Types of Binding Financial Agreements

    BFAs are versatile and can be tailored to different stages of a relationship:

    1. Prenuptial Agreements (Before Marriage): Entered into by couples intending to marry, effective upon marriage.
    2. Postnuptial Agreements (During Marriage): For couples already married who wish to formalise their financial arrangements.
    3. Separation Agreements (After Separation but Before Divorce): Used to finalise a property settlement immediately after separation, avoiding the standard 12-month waiting period for a divorce.
    4. De Facto Relationship Agreements: These cover the same scenarios—before, during, or after a de facto relationship—and are equally binding provided the legal requirements are met.

    Who Should Consider a Binding Financial Agreement?

    While any couple can benefit from the clarity a BFA provides, they are particularly prudent in circumstances such as:

    • Individuals entering a relationship with significant pre-existing assets, such as a business, inheritance, or real estate.
    • Those with children from prior relationships who wish to preserve wealth for those children.
    • Partners with disparate financial backgrounds or future earning capacities.
    • Business owners or professionals seeking to protect business assets or partnership interests from potential relationship claims.
    • Individuals approaching retirement with accrued superannuation and other assets they wish to safeguard.
    • Couples who simply value financial clarity and wish to minimise potential for future conflict.

    Legal Requirements for a Valid BFA

    The technical requirements for a valid BFA are strict, and failure to meet any can render the agreement void. The key requirements include:

    • Written and Signed: The agreement must be in writing and signed by both parties.
    • Independent Legal Advice: This is non-negotiable. Each party must receive independent legal advice before signing about:
      • The advantages and disadvantages of the agreement.
      • The agreement’s effect on their rights.
      • Whether the agreement is fair and reasonable in the circumstances.
    • Lawyer’s Certificate: The solicitor providing the advice must provide a signed certificate confirming the advice was given. This certificate is attached to the agreement.
    • No Vitiation Factors: The agreement must not be entered into under duress, fraud, undue influence, or with the intention to defraud a creditor. Both parties must provide full and frank financial disclosure.

    What Can Be Included in a Binding Financial Agreement

    BFAs offer significant flexibility. Common provisions address:

    • Division of Property: Specific assets (e.g., the family home, investment properties, shares) can be allocated to each party.
    • Treatment of Debt: Responsibility for mortgages, loans, and credit card debts can be assigned.
    • Superannuation Splitting: Agreements can specify how superannuation interests are to be split or preserved.
    • Spousal Maintenance: Parties can agree to waive, cap, or set terms for future spousal maintenance claims.
    • Inheritances and Future Assets: The agreement can stipulate how future-acquired assets or windfalls (like an inheritance) are to be treated.
    • Financial Support During the Relationship: While less common, BFAs can outline ongoing financial arrangements.

    It is critical to understand what a BFA cannot effectively cover. It cannot make binding arrangements regarding parenting or child support, as the court always retains jurisdiction to ensure the best interests of children are met.

    Advantages and Limitations of Binding Financial Agreements

    Advantages:

    • Certainty and Control: Provides definitive, pre-agreed outcomes, removing uncertainty and stress during a separation.
    • Asset Protection: Safeguards pre-acquired wealth, family inheritances, and business interests.
    • Cost and Time Efficiency: Can prevent lengthy, expensive court battles over property settlement.
    • Privacy: Keeps financial arrangements private, unlike court proceedings which are a matter of public record.
    • Flexibility: Allows couples to design a settlement that suits their unique circumstances, rather than accepting a court-imposed formula.

    Limitations and Risks:

    • Strict Formalities: The technical requirements are a minefield for the unwary. A DIY or poorly drafted agreement is highly likely to be set aside.
    • Potential for Future Unfairness: An agreement that is grossly unfair or fails to account for significant future changes (e.g., the birth of children, illness, a dramatic change in fortunes) may be vulnerable to challenge.
    • Not “Set and Forget”: A BFA should be reviewed and potentially updated after major life events.
    • Cannot Oust Court Jurisdiction: While binding if valid, a party can still apply to a court to have the agreement set aside under specific grounds in the Family Law Act.

    Changing or Ending a Binding Financial Agreement

    A BFA is not necessarily forever. It can be terminated or amended:

    • By a Subsequent Agreement: The parties can enter into a new BFA that expressly terminates the previous one and sets out new terms.
    • By Formal Termination Agreement: The parties can sign a simple written agreement to terminate the BFA, provided both receive independent legal advice on the termination.
    • Upon Marriage (for de facto BFAs): A BFA made during a de facto relationship is automatically terminated if the parties marry, unless it expressly states it will continue to operate after marriage.
    • By Court Order: A court can set aside a BFA on specific grounds, such as fraud, failure to disclose assets, it being voidable (e.g., under duress), or if circumstances have arisen making it impracticable for the agreement to be carried out.

    Our Services

    GJA Law assists Sydney clients with a wide range of binding financial agreements matters, including:
    – Reviewing and drafting contracts or agreements
    – Advising on legal rights and obligations
    – Negotiating terms or resolving disputes
    – Working with agents, financial advisors, or other professionals where necessary
    – Managing the process through to completion with accuracy and efficiency

    • Dealing with GJA was a great experience. I felt comfortable at all times with their advice. My situation and the process was explained in laymans terms. As a result they won the case for me.

      Nick

    Why Choose GJA Law?

    – Clear, practical advice tailored to your situation
    – Fixed-fee certainty for common matters and transparent time-costed support for complex issues
    – Decades of experience across property, estate planning, and family law
    – Early adopters of technology to streamline processes and reduce errors
    – A client-focused approach that prioritises your goals and peace of mind

    Learn More About Family Law

    Contact Us

    If you are dealing with binding financial agreements in Sydney, contact GJA Law today. Our experienced lawyers will guide you through the process with confidence and provide the support you need.

    Common Binding Financial Agreements FAQs

    What is a Binding Financial Agreement and what is it used for?

    A Binding Financial Agreement (BFA) is a private, legally enforceable agreement that allows couples to determine how their assets, liabilities, and financial resources will be dealt with if their relationship ends. It can also regulate spousal maintenance obligations. By setting out these arrangements in advance—or upon separation—a BFA removes uncertainty and avoids the need for court-imposed property settlements.

    When can a Binding Financial Agreement be made?

    A BFA can be made before a relationship begins, during a marriage or de facto relationship, or after separation. Couples often enter into BFAs before marriage or cohabitation to protect pre-existing assets, while others use them after separation to finalise financial matters quickly. The timing affects which section of the Family Law Act applies, but the legal effect is similar.

    Is independent legal advice really mandatory?

    Yes. Independent legal advice for both parties is an absolute legal requirement. Each person must receive advice from their own lawyer about the effect of the agreement and its advantages and disadvantages. Without this advice—and the accompanying solicitor’s certificate—the agreement is at high risk of being declared invalid by a court, regardless of how fair it appears.

    What can and cannot be included in a BFA?

    A BFA can cover the division of property, responsibility for debts, treatment of superannuation, and spousal maintenance arrangements. It can also address how future assets or inheritances will be treated. However, BFAs cannot make binding decisions about parenting arrangements or child support, as courts always retain power to protect the best interests of children.

    Can a Binding Financial Agreement be challenged or set aside?

    Yes. While BFAs are intended to provide certainty, courts can set them aside in limited circumstances, such as fraud, failure to disclose assets, duress, undue influence, or where the agreement has become impracticable. Agreements that are poorly drafted or significantly unfair due to unforeseen changes may also be vulnerable. Careful drafting and regular review reduce these risks.

    Should a Binding Financial Agreement be reviewed over time?

    Absolutely. A BFA should not be treated as a “set and forget” document. Major life changes—such as having children, serious illness, business growth, or approaching retirement—may warrant review or replacement of the agreement. Regular reviews help ensure the agreement remains fair, relevant, and legally robust as circumstances evolve.

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