Binding Financial Agreements - Rayner Song Family Lawyers

Binding Financial Agreements

In a nutshell, a Binding Financial Agreement (“BFA”) is a private legally-binding agreement entered into by two parties to record their agreement about how to divide their assets. There are two main types of BFAs and they are:

  1. BFAs signed before two parties have separated: This document will record the parties’ agreement about how their assets and debts should be divided in the event of a future separation. It is colloquially known as a prenuptial agreement or “prenup”. It can cover assets that each party received after the signing of the document, including inheritances. It is a useful method for asset protection. It is particularly useful when one party has more assets or earns a higher income than the other, or expects to receive a significant inheritance.
  2. BFAs signed after two parties have separated: This document records the parties’ agreement about how to divide their assets and debts now that they have separated.

You may wish to consider entering into a Binding Financial Agreement if:

  • You have substantially more assets than your partner at the beginning of your relationship.
  • You expect to receive a significant inheritance.
  • Your parents or family gifted you a large sum of money.
  • You are concerned your spouse may claim spousal maintenance from you in the future.
  • You earn significantly more than your partner.

It is crucial that BFAs are carefully drafted in order so that it meets legal requirements and is actually binding. A poorly drafted BFA is vulnerable to being challenged in the future.

No two set of circumstances are the same. The BFA needs to reflect your unique financial position and the unique terms by which you would want to divide your assets in the event of separation.

Each party will need to be independently represented and properly advised before enter into a Financial Agreement, ideally by a lawyer who specialising in Family Law.

We can advise on whether a BFA is suitable for you and can assist with drafting a BFA or reviewing a BFA that has already been drafted by your spouse’s lawyer.

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