Binding Financial Agreements
In this video, Page Provan Managing Director and Accredited Family Law Specialist, Bruce Provan discuss what you need to know about binding financial agreements.
My name is Bruce Provan I’m the Managing Director of Page Provan Family and Fertility Lawyers, we’re a practice in central Brisbane that specialises in family and fertility law.
I want to talk today about binding financial agreements. For a number of years, binding financial agreements have been lawful and as the name implies, binding agreements between the parties. There’s a few different types of binding financial agreements.
There can be a binding financial agreement that the parties enter into before they are married or before they commit cohabitation, otherwise known as prenuptial agreements. There can be a binding financial agreement that the parties enter into during the course of their relationship, and there can be a binding financial agreement that the parties enter into after they have separated.
Now, for those binding financial agreements post-separation, they can cover the division of property between the parties, consequent upon the separation. More commonly, agreements reached post-separation, regarding the division of property are dealt with by way of an application for consent orders that is lodged in court, but it can be done by way of a binding financial agreement.
Now, the key thing about a binding financial agreement is that both parties must have independent legal advice and both lawyers must sign a certificate to say that they have given their client advice about the advantages and disadvantages of entering into the agreement.
Now, quite commonly, post-separation, what happens is that people negotiate an agreement between themselves regarding the division of property, and that will be formalised in an application for consent orders. But there will be a separate binding financial agreement where the parties agree that they’re not going to make a claim for spouse maintenance against the other.
As I mentioned earlier, it’s quite common for there to be a prenuptial agreement, that is, the parties reach an agreement about how their property is going to be divided between them in the event that they separate, and that can either be a marriage or a de facto relationship.
These types of binding financial agreements are common for people entering into a second or subsequent relationship. They’re often people who have accumulated some wealth. They come into the relationship, they’re a bit older, and they want a document that is going to provide that they can take most of that wealth or all of that wealth out of the relationship in the event of a separation.
With those sorts of agreements, it’s absolutely vital that the parties enter into the agreement of their own free will, in other words, it’s voluntary and that one person hasn’t pressured the other person to sign the agreement.
There have been cases where these agreements have been set aside, where the court has found that a person has been subjected to undue influence or unconscionable conduct. In other words, forced into reaching an agreement or left with the idea that they’ve got no choice but to sign the agreement and even when both parties have had independent legal advice, the courts have sometimes set those agreements aside.
The other type of binding financial agreement, as I mentioned, is a binding financial agreement made during the course of the relationship and again, similar to a prenuptial agreement, it can provide how in the event of a separation, how the property is to be divided up between them.
So if we can assist you with the preparation of a binding financial agreement or advise you about a binding financial agreement that has been prepared by the solicitors for your former partner or current partner or partner to be, please contact us at Page Provan, Family and Fertility Lawyers.