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Binding Financial Agreement Adelaide
What is a binding financial agreement?
Binding financial agreement is an area of family law whereby under the Australian law, parties to a marriage or de facto relationship have the ability to enter into a binding legal agreement to govern the financial arrangements should a marriage or relationship break down or end in divorce. This is particularly important where children are involved, one spouse or partner earns considerably more than the other or stays at home to provide care for children, or other circumstances could make a break-up difficult. Binding financial agreements are also known as 'prenuptial agreements' and 'financial agreements'.
According to the Australian Institute of Family Studies, statistics show that percentage of Australian marriages now ending in divorce is at its lowest level in nearly 40 years. One of the many reasons for this reduction in the level of divorces in Australia is the passage of the Family Law Act of 1975, which first introduced the concept of binding financial agreements. This has helped to lower the number of divorces by ensuring that couples have a smooth, predictable way to ensure that both spouses or partners, as well as any children, are taken care of financially in the event of a divorce or break-up.
A binding financial agreement can be a valuable tool to create peace of mind to know that not only will you, but your children, will be taken care of in the event that you and a spouse or significant other decide to split up and go your separate ways. Even if you do not have children, it also can be an excellent planning tool to ensure that, if the unfortunate and unexpected happens and a marriage or long-term relationship ends, then both parties are adequately protected.
The purpose of a binding financial agreement
The purpose of the agreement document states how the assets, such as property and other financial resources will be distributed after separation or divorce. Instead of going to Court, if parties can reach a mutual agreement between themselves, either by negotiation or by mediation, then they can record the terms of their settlement in a binding financial agreement. This can save you time and money.
Legal requirements for a binding financial agreement
In order for a binding financial agreement to be valid under Australian law, each of the parties to the agreement must first have sought independent legal and financial advice before the agreement is formally executed. Both parties must then also sign the agreement; a binding financial agreement would be invalid if signed by one party but then the other party to the agreement seeks to have the agreement enforced and claims that the other spouse orally agreed to all the conditions of the binding financial agreement. You can make a financial agreement before, during or after a marriage or the formation of a relationship with a spouse or significant other.
The benefits of a binding financial agreement
One of the main benefits of a binding financial agreement is that the terms and conditions are kept private between the parties and not filed in Court. It is also a very valuable planning tool for couples that may wish to have a contingency plan in place if the marriage breaks down or the couple decides to split. It leaves the parties in a settled position, each knowing exactly what he or she will walk away with if the relationship ends. It also reduces the costs and uncertainties associated with protracted and costly legal proceedings and can also enable the parties to move forward with certainty as to the financial aspect of their lives.
We’re here to help
At Armour Allen Lawyers, our experienced Adelaide family lawyers can assist you by counseling you regarding whether a binding financial agreement may be right for you and then by drafting the agreement itself. If you are in need of help in resolving financial issues in connection with the end, or potential end, of your marriage or relationship, contact our specialist family lawyers. We offer a first interview free at no cost and no obligation.