Are Binding Financial Agreements actually enforceable

Will my Binding Financial Agreement be legally enforceable 

Will your BFA “stand up” to scrutiny if your former spouse won’t abide by it?  Difficulties frequently arise when parties buy a template document but don’t engage a Lawyer to actually customise it to their circumstances.

Financial Agreements will only be binding, enforced by a Court and have to be followed by your partner, if all of the legal requirements are met as required by the Family Law Act 1975 and case law that has interpreted the Act.

The Court or your partner will not have to follow the provisions you agreed upon and put in your Binding Financial Agreement if it is found to be invalid, so unenforceable and is set aside, because you did not comply with all of the legal requirements.

Legal Requirements for a Binding Financial Agreement

The legal requirements which must be met for a BFA (Financial Relationship Agreement) to be valid and enforceable, include:

 



 

  • The Binding Financial Agreement must be signed by all parties.
  • Before Binding Financial Agreement is signed each party must obtain their own independent legal advice.
  • The Lawyers who give the advice must give advice addressing specific matters set out in the legislation and then sign the required Certificate (which is provided to the client before they sign the Binding Financial Agreement);
  • A copy of each of the Certificates signed by each of the Lawyers, must be provided to both parties.

Effectiveness of your Binding Financial Agreement

Nobody can guarantee absolutely that a Binding Financial Agreement will be binding and completely enforceable legally, as the possibility of someone successfully applying to the Court to have the agreement set aside can never be completely eliminated.

Simply having an agreement can lessen the likelihood of court action.

Even if a person does apply to the Court to have the BFA set aside, a court will not interfere with an agreement just because it is unfair.

The fact that both parties must have, before they signed the agreement, each obtained their own Independent Legal Advice and obtained Certificates from the Lawyers giving them the advice, will assist in arguing against any suggestion by one party that they did not understand what they were signing or its consequences.

We explain the circumstances in which a Binding Financial Agreement may be declared to be invalid and set aside by a Court in our separate information sheet Can a Binding Financial Agreement be set aside, updated or terminated.

Binding Financial Agreements: What else should you know

We detail the basics about Binding Financial Agreements you should be aware of in our information sheet What is a Binding Financial Agreement.

What can you put in your Binding Financial Agreement? What should you discuss with your spouse before you enter into a BFA. Find out the answers in the information sheet What can you include in a Binding Financial Agreement.

Can you draft your Binding Financial Agreement yourself without using a lawyer. Read the answer in our information sheet Can I prepare a Binding Financial Agreement myself.

You must be eligible to legally enter into a Binding Financial Agreement with your partner for it to be valid and enforceable. see more in our information sheet Who can enter into a Binding Financial Agreement.

Timing as to when you enter into a Binding Financial Agreement can be important. We explain more in our information sheet When can you enter into a Binding Financial Agreement.

Have you commenced living together, already got engaged, already had a baby with your spouse or even got married and only afterwards thought about getting a Binding Financial Agreement. If so, read our information sheet Is it too late to enter into a Binding Financial Agreement.

If you have entered into a new relationship you should think about about the provisions of your Will or what might happen after you pass away. Read why in our information sheet How having a Binding Financial Agreement might help your Succession Planning.

Understand the benefits of doing a Binding Financial Agreement with your spouse in the information sheet What are the Advantages of a Binding Financial Agreement.

We discuss any possible downside of doing a Binding Financial Agreement in the information sheet What are the Disadvantages of a Binding Financial Agreement.

You may also find our information sheet How to tell your Partner you want a Binding Financial Agreement helpful.

If you have separated or divorced and need to document your agreement about property settlement in a legally enforceable and binding way, then our information sheet Should I use a Binding Financial Agreement or a Consent Order will assist you.

 

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