A binding financial agreement is an agreement between de facto couples, soon to be married or already married, which is concluded before, during or after their relationship. At Graham v Squibb, the day before their wedding, the husbands had signed a contract called “Pre-Nuptial Agreement”. The agreement was that each party would retain the property it took in the marriage in the event of separation. The agreement deducted the property belonging to each party in separate schedules. The agreement did not extend to property acquired by the parties after the marriage. In the following video series, CGW family partner Justine Woods discusses what you need to know about binding financial arrangements for married and de facto couples, including the pros and cons, risks and potential flaws, and what the process will likely entail. Compelling financial agreements must be carefully developed to ensure that they take into account all structures such as family trusts, businesses and self-managed super-funds, as well as tax implications and other obligations. When considering marriage or entering into a common-law relationship, a binding financial agreement (BFA), sometimes referred to as “pre-nup,” can be a practical and effective way to protect your wealth and avoid the potential emotional and financial costs of a relationship breakdown. But what makes the BFAs contractual and can they be overthrown by a judge? Read the main basics here.
However, it is important to keep in mind that FBAs are complex contracts and require specialized family law advice. The lawyer needs considerable expertise to stick to his obligation to law the family to ensure that the BFA is effectively binding. Whatever you do, you should not keep a lawyer to go to a BFA based on how much they calculate, design or advise. They must ensure that they specialize in family law and that they have experience in the development of the BFAs. Unfortunately, it is all too common for a BFA to be overturned by the court for poor wording or poor deliberation. Each BFA must be highly tailored to the various parties involved and, as such, it is necessary to provide proactive and strategic advice from the lawyer who drafts and/or advises the document. Pre-travel must be written in such a way as to meet all the many legal requirements and in a way that means that it will be maintained in the future if it is called into question. If your partner has asked you to sign a binding financial agreement, you should consult an independent family lawyer before signing. The judge, McNab J., found that the parties had a common intention to enter into a binding pre-marriage financial agreement and that they signed the agreement on the day before the wedding date, after receiving independent legal advice. His honour ordered that the agreement be corrected to replace the reference to the “Victoria Laws” with a reference to Section 90B of the Family Law Act.
The correction was necessary to correct the “legal nonsense” created by a clause in the agreement that dealt with “Victoria`s laws” in a clearly restricted area of jurisdiction.