Binding Financial Agreements.

FAQ.

• When is the right time to sign a binding financial agreement?

  You’re not limited to signing a binding financial agreement before marriage. Couples, whether married or in a de facto relationship, can put one in place before they live together, during the relationship or after they separate. The right timing depends on what you are trying to achieve and what stage of life your relationship is in.

• What does a binding financial agreement cover?

  A BFA can deal with how existing assets and debts will be divided, as well as how you will treat property you expect to acquire in the future. It can also address spousal maintenance, either by setting out what will be paid or by confirming that neither person will make a claim, depending on what you both decide.

• What if the terms favour one person more than the other?

  A binding financial agreement does not have to split everything down the middle, and in many cases it will favour the person with greater financial resources. What matters is that it is not entirely one-sided that a court is likely to step in. Our relationship lawyers can talk you through whether the proposed terms are within a reasonable range or whether they create a real risk of challenge later on.

• Can I change a binding financial agreement later?

  You can’t make changes to a binding financial agreement in the way you might update a will or policy. To change it, you usually need to terminate the existing agreement and replace it with a new one, and both of you must again receive independent legal advice. This is why it’s important to draft the first agreement with future changes in mind, such as the possibility of children or shifts in income, while still keeping it strong enough to be enforced if it’s ever tested.

• Will a binding financial agreement actually hold up?

  Yes, provided the formal requirements are met. Each person must receive independent legal advice from their own lawyer, who explains the advantages and disadvantages of the agreement before it is signed. Once that advice has been given and the document is properly executed, it is generally treated as legally enforceable, although a court still has limited power to set it aside in specific circumstances, for example if there was serious non-disclosure or undue pressure.

• How much does a binding financial agreement cost?

  The cost of a binding financial agreement depends on how complex your financial situation is and what you want the document to cover. Some agreements are relatively straightforward, while others involve businesses, trusts or multiple properties and require more detailed drafting. Because each person must have their own lawyer, you may also need to allow for your partner’s advice costs, especially if they have fewer resources. Although there is an upfront investment, many people find that a well prepared agreement is far less expensive than dealing with a contested property settlement through the courts after a separation.