When a relationship breaks down, there are many difficult decisions to be made. One of the most important is how to divide your finances. In Australia, couples can choose to enter into a binding financial agreement (BFA) to settle property and financial matters after separation.
A BFA is a legally binding agreement that outlines how property and financial assets will be divided between two parties. It is a contract that can be entered into before, during, or after a relationship. However, it must be done so voluntarily and with the advice of a legal professional.
There are several benefits to entering into a BFA. Firstly, it provides certainty and stability for both parties. It ensures that each person knows exactly what they are entitled to and what they are responsible for. This can help to avoid disputes and conflicts down the track.
Secondly, a BFA can save time and money. Rather than going through the court system to resolve property and financial matters, a BFA can be used to settle these issues out of court. This can be a quicker and less expensive process for both parties.
Finally, a BFA provides privacy. Unlike court proceedings, a BFA is a private agreement between two parties. It does not become part of the public record and is not open to scrutiny by others.
However, there are some important things to consider before entering into a BFA. Firstly, both parties must enter into the agreement voluntarily and with the advice of independent legal representation. This is to ensure that each person fully understands the terms of the agreement and the implications of signing it.
Secondly, a BFA must be fair and reasonable. If it is found to be unfair or unconscionable, it may not be enforceable. Therefore, it is important to seek legal advice to ensure that the BFA is fair and reasonable for both parties.
Finally, a BFA may not cover everything. It is important to seek legal advice to ensure that all relevant property and financial matters are covered in the agreement.
In conclusion, a binding financial agreement can be a useful tool for couples who are separating. It provides certainty, stability, privacy, and can save time and money. However, it is important to seek legal advice and ensure that the agreement is entered into voluntarily and is fair and reasonable for both parties. With the right legal advice, a BFA can help couples to negotiate a fair and equitable division of their finances.