Binding Financial Agreement After Separation or Divorce

When a relationship ends through separation or divorce, property settlement may be required for separating assets. This is an area of family law where a lawyer can be invaluable, helping parties to draft an agreement or negotiate a settlement through mediation.

A Binding Financial Agreement (BFA) is a binding and enforceable contract made between two parties that deals with financial or property matters. A BFA can be drawn up at any time in the relationship, such as prior to or while living together, before marriage (also referred to as a pre-nuptial agreement), or after separation or divorce.

When dividing assets for a Binding Financial Agreement after separation or divorce, there are many factors that need to be taken into account, including:

• The assets being divided
• Who contributed certain assets within the relationship
• Who provided family care within the relationship
• The current earnings and future earning capacity of each party
• The arrangements in place for any children

A BFA will clearly outline the details of a property settlement and how assets will be divided. It will also include a quick background of the relationship and the assets involved. A Binding Financial Agreement after divorce or separation must be properly drafted to ensure each party receives a fair and equitable share of assets, including payment of spousal maintenance. When a BFA isn’t drafted properly, it may be unenforceable by the court.

The Advantages of a BFA

• More time efficient compared to other property settlement methods
• Assets can be divided in a way that suits both parties
• Can be entered into at any time during the relationship, including before marriage (prenup agreement), during marriage, or when separating or divorcing

The Disadvantages of a BFA

• Both parties must seek independent legal advice separately. If a party fails to obtain this advice, the BFA will be unenforceable
• Can be unenforceable if poorly drafted or entered into under duress
• The use of ambiguous terms could be used to disadvantage one party
• Application to the court to enforce a Binding Financial Agreement can be complicated

How PCL Lawyers Can Help

If you’re separating or divorcing amicably, our Binding Financial Agreement lawyers can provide advice on drafting an agreement that’s fair and equitable for both parties. We understand the importance of a clear, concise and well-drafted document that can be enforced by the court if necessary. We can also provide legal advice to help you explore other avenues that may be required, such as dispute resolution, negotiation or going to court.

If you have any questions about how we can help with a Binding Financial Agreement after separation or divorce, call us on 1300 907 335 or fill out our online enquiry form to receive a prompt response.