A Binding Financial Agreement (BFA) under Section 90B of the Family Law Act 1975 (Cth) is a legal agreement between two parties who are contemplating marriage. This agreement outlines how the parties’ property and financial resources will be divided in the event of separation or divorce.
The value of a Section 90B Binding Financial Agreement
While a Section 90B BFA can offer financial protection to you, there are also non-monetary benefits that can be gained from having one in place. Some of those benefits include:
- Peace of mind. Knowing that your financial future is protected can help you feel more secure and less anxious about the possibility of a future separation or divorce.
- Provide clarity and certainty regarding financial matters. By establishing how property and financial resources will be divided in advance, couples can avoid potential conflicts and disagreements in the event of a separation or divorce.
- Privacy. Unlike court proceedings, which are generally open to the public if heard in open court, a Section 90B BFA is a private document between the parties involved. This can help you protect your personal and financial information from being disclosed to the Court or anyone other than those people or organisations you agree to in the Agreement.
- A sense of control over one’s financial future: By negotiating and agreeing on the terms of the BFA, you can ensure that your financial interests are protected according to their wishes and preferences.
Overall, the non-monetary value of a Section 90B BFA can be significant, as it can offer peace of mind, clarity, certainty, privacy, and a sense of control over one’s financial future.
What you need to do:
In completing a Binding Financial Agreement under Section 90B the Agreement must set out the following:
- Identify the parties: The agreement should identify the parties by their full names, date of birth, and current addresses.
- Declare the nature of the relationship: The agreement should declare the nature of the relationship, whether the parties are engaged and that they are contemplating marriage.
- Declare assets and liabilities: The agreement should list all assets and liabilities of each party at the time of entering into the agreement, including real estate, investments, savings, superannuation, and debts.
- State the division of property: The agreement should set out how the parties’ property will be divided in the event of separation or divorce. This may include a percentage split, specific assets to be allocated to each party, or any other arrangements agreed between the parties.
- Outline financial support: The agreement should state whether there will be any financial support provided by one party to the other in the event of separation or divorce. This may include spousal maintenance payments.
- Sign the agreement: Both parties must sign the agreement, and their signatures must be witnessed by an independent third party.
- Seek legal advice: Before the agreement ban become binding, both parties must seek independent legal advice from separate lawyers about the advantages and disadvantages of entering into the agreement at the time of entering into it. The lawyers must sign a Certificate stating that they have given that advice and then the Agreement becomes binding.
- Keep a copy: Each party should keep a certified copy of the agreement, and the original should be stored in a safe place.
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