Binding Financial Agreement Services
Located in Revesby Servicing South West Sydney
What Is a Binding Financial Agreement? What two decades has taught us.
A binding financial agreement (BFA) is a legally enforceable contract between two people in a relationship that sets out how their assets, debts, superannuation and financial support will be divided if they separate. Couples in Australia, can enter one before, during or after a marriage or de facto relationship. In effect, it lets you decide your own financial terms privately, rather than leaving property division to the courts.
“After 20 years, we’ve seen exactly how these agreements succeed and where they fall apart,” says founder Bruce Batey”.
Protecting your finances after a relationship breakdown is crucial. But there is no need to wait until after a separation to begin thinking about property matters. You can use a binding financial agreement to make financial arrangements at any time.
Bateys Law Firm has been helping clients in Revesby and South-West Sydney protect their financial future with a BFA for over a decade. Obtaining independent legal advice from our team can help you assess your financial circumstances and protect your entitlements.
What a BFA does
BFAs are legally binding private contracts covering a couple’s property division. It can cover the relationship’s entire asset pool, including:
Business interests.
Financial resources, such as an expected inheritance.
Bank accounts.
Investment properties.
Personal debts.
Mortgages.
BFAs can also have provisions for financial support, like spousal maintenance. Spouses can enter a BFA during their marriage or after separating. The Family Law Act also allows couples in a de facto relationship to agree to a BFA. Agreements made before marriage are sometimes called a pre-nuptial agreement, although that term is more common in the USA.
When a BFA may suit you
Our clients have benefited from a BFA for a variety of reasons. Here are some common scenarios where BFAs can be advantageous.
You may be operating a family business and wish to avoid risking losing ownership control. Assets like family trusts and investment properties can be complicated to deal with. A BFA can give you strict control over exactly how you want these assets to be managed.
You and your partner may both have children from a previous relationship. BFAs can provide asset protection and help you balance a desire to ensure your children are taken care of, and the current relationship. An agreement can reduce the chances of facing disputes that arise from uncertainty.
A court order has to be approved by the Federal Circuit and Family Court of Australia (FCFCOA). That means that the division is out of your hands to some extent. A BFA can give you more control and keep your financial matters private.
What makes a BFA legally binding?
Binding financial agreements are governed by the Family Law Act 1975 — Part VIIIA for married couples and Part VIIIAB for de facto couples. BFAs have to meet strict legal requirements to be a valid legal document. This includes the following criteria:
Years of Family Law
A BFA can be set aside if these legal requirements aren't met.
BFAs can also be set aside for broader reasons than consent orders, including:
- One person was coerced into agreeing or agreed under duress.
- Financial disclosure that failed to divulge a material matter.
- There's been a significant change in circumstances related to the care and welfare of a child, causing hardship.
How long does a BFA take, and what does it cost?
Careful drafting is what makes the agreement enforceable, so the timeframe reflects the work involved in getting it right. In Sydney, a BFA typically takes around 2 to 8 weeks to complete, depending on the complexity of your circumstances and how quickly documents are gathered.
To prepare your agreement, we’ll usually need supporting documentation such as:
Recent bank statements.
Property valuations.
Superannuation details.
As a general guide, BFAs in Australia often range from around $4,000 to $10,000 or more, depending on the complexity of the asset pool and whether both parties’ arrangements are straightforward. Because each agreement is different, we’ll talk you through the likely effects and enforceability of your BFA from the outset, so you understand what you’re agreeing to before you sign.
Can a BFA be changed or ended?
A binding financial agreement is designed to last, but it isn’t always permanent. A court may set aside or modify a BFA in limited circumstances, for example where the agreement has become unjust or unreasonable. The parties can also choose to end an agreement themselves by signing a Termination Agreement.
A BFA continues to operate after one party’s death and binds their estate, unless it has been terminated. Because life circumstances change through children, new property, or a change in financial position, it’s sensible to review your agreement every 3 to 5 years to make sure it still reflects your intentions.
Consent orders versus BFAs
Clients who are looking to enter a property settlement sometimes struggle to decide whether they should go for a consent order or a BFA. If this is you, here are some factors to consider. Some people prefer consent orders because:
- They typically have lower legal costs.
- They're approved by the FCFCOA and so aren't generally easy to challenge.
- There's a straightforward application process that may be completed without a lawyer.
BFAs tend to appeal to parties that:
- Want privacy when managing their finances.
- Need the flexibility to tailor specific clauses.
- Owned considerable assets going into the relationship.
- Have children with a former partner they wish to provide for.
Neither option is necessarily better than the other. It all depends on your situation. If you’re not sure what would work for you, we can help you understand how each may impact your circumstances.
How Long Does a BFA Take?
In our experience, a binding financial agreement usually takes between two and eight weeks to finalise in Sydney. There is a caveat, though, where parties are in conflict, the process can sometimes drag out to months, and in the worst cases, years. The timing depends on the complexity of your asset pool and how quickly both parties can gather their documentation.
We never rush the drafting. We’ve seen too many people come to us after a rushed agreement has already caused them serious problems. A BFA that’s prepared too quickly is far more likely to be challenged or set aside later, so we take the time to get the wording right, that care upfront is what makes the agreement hold up.
To prepare your agreement, we’ll typically ask you for documents such as recent bank statements and current property valuations. Having these ready early helps us give you accurate advice and keeps the process moving.
Why clients trust our process
We’ve developed a deep trust with our clients because our experienced family lawyers approach cases with compassion and help reduce their financial stress. When you work with us, we follow a clear process for your peace of mind:
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Disclaimer: This page provides general information only. It is not legal advice. Family law outcomes depend on your circumstances. You should speak with a family lawyer before making decisions about your matter.