Binding Financial Agreements
Binding Financial Agreements are drafted to keep matters out of court and thus, negate court costs and keep time and expenditure to a minimum. These agreements determine the division of property, assets, spousal maintenance and financial resources in the event of relationship dissolution. Settling out of court is the optimal solution as it swiftly finalises the separation and divorce if applicable in terms that you both agree to: please see our Arbitration / Mediation / Negotiation section for more information.
Due to the amendments made to the Family Law Act in 2001 and 2002, Binding Financial Agreements can be arranged by persons entering into a relationship and thus enforced in the event of relationship dissolution, although in certain circumstances they can also be drafted during and even after a relationship has terminated. They also apply to both marriages and de facto (including same sex) relationships. This means that prior to exacting orders, the Family Court defers to any terms already stipulated in the agreement and should ideally settle any disputes for commonly held assets, such as properties or finance. What this means is, it can be as simple or as complex as the parties agree to, however, any terms (e.g. assets, properties, etc.) not covered by the agreement are under the jurisdiction of the Family Court of Western Australia and judgment will be made accordingly. People make these agreements as personal assurances that in the unlikely event that the relationship dissolves, the assets acquired prior to the initiation of the relationship, as well as any uneven contributions (e.g. disproportionate salaries) are protected and insured against an inequitable outcome. It also prevents stressful and costly court appearances, as the property distribution is either already or easily determined.
For the agreement to be validated, each party needs to have sought independent legal advice and be provided with a confirmation certificate. If a financial agreement does not comply with legislation, the Family Court of Western Australia can invalidate the agreement and exact court orders to determine property and asset division.
Financial agreements once made, can be altered only by overwriting the original agreement or terminating the agreement in writing, though they can be overruled if they do not comply with legislation. Situations where this may apply would include subsequent relationships, business affairs, protection of inherited assets or to accommodate court imposed decisions.
Contact Us today if you’re thinking about entering into a Binding Financial Agreement and we’ll be happy to arrange an initial consultation.