Financial Agreements Lawyers Perth

Financial Agreements

A Binding financial agreement (BFA) is a legally binding document that our team of family lawyers can create for you based upon your instructions. 

Its purpose is to govern your property interests in the event of a separation in a simple, predictable and final way. A BFA may include distribution of property, debts, superannuation, spousal maintenance and other financial matters. 

A BFA can be created before, during or after a de facto relationship or marriage.

I’m about to get married. Do I need a financial agreement?

There is no right or wrong answer to this.  Some of the common reasons people might enter into a binding financial agreement before the commencement of a marriage may include: 

  • you are bringing substantial assets into the marriage;
  • you are likely to receive a substantial inheritance at some point in your marriage; 
  • you have a particular asset you want to protect;
  • you want certainty of outcome if your marriage breaks down; or
  • you have children you want to provide for in the event of a marriage breakdown. 

What is the difference between consent orders and a binding financial agreement?

Consent orders and BFAs are the two options separating couples have for making their property and financial agreement legally binding. There are substantial differences between the two. 

  1. What can be included?
    Consent orders can include arrangements for your children, whereas BFAs are for the purpose of property and financial matters only. 
  2. When can they be made?
    Consent orders can only be made after separation. BFAs can be entered into before, during or after a marriage or de facto relationship. 
  3. Legal advice
    It is not compulsory to receive legal advice for consent orders, though it is recommended. It is, however, a strict requirement for both parties when entering into a BFA. A BFA is not valid if either party has failed to obtain independent legal advice. 
  4. ‘Just and equitable’
    Consent orders are lodged at the Family Court of WA, which will then determine whether the proposed property and financial orders are just and equitable.
    BFAs, on the other hand, are not lodged at the Family Court at all. A BFA is essentially a legally binding contract between you and your partner or ex-partner. 

What can a BFA cover?

As the name suggests, a BFA is used for the purpose of dealing with property and financial matters. In a family law context, this includes distribution of property, debts, superannuation, spousal maintenance and other financial matters. 

Can I draft a binding financial agreement myself?

We do not recommend clients draft their own financial agreements, as important details may be missed or drafted in such a way that might be misinterpreted.  

This means that your BFA may not meet the requirements for it to be considered legally binding. 

Do I need a lawyer in this process?

In order for your BFA to be legally binding, both parties need to obtain independent legal advice, which is usually confirmed in a letter. This letter sets out the advantages and disadvantages of entering into the BFA, and its effects on your legal rights. Each party’s lawyer also needs to sign a certificate of independent legal advice, which must be attached to the back of the BFA.

Can my partner and I have the same lawyer provide a certificate of independent legal advice?

No. “Independent legal advice” means that you and your partner need to have different lawyers advise you about the BFA. 

Can I include children’s issues in a binding financial agreement?

No. BFAs are only for property and financial matters. 

Are there any circumstances in which a financial agreement might be deemed invalid?

There are limited situations in which this might happen. This may include things like: 

  1. Fraud- The agreement was made fraudulently, for example if there was material non-disclosure of assets.
  2. Duress- this means being forced into doing something. This does not mean that the other party literally has to force your pen to paper, but rather that there are circumstances in which a party has felt bullied or pressured into signing.
  3. Unconscionability- The agreement was made unconscionably. This means that one party used their position of power to make the other sign the binding financial agreement, to the extent that it may not be deemed to have been made under their own free will. 

CASE STUDY:

Walter v Ivanov [2018] 

In this case, the parties met online. The husband was 67 years old and the wife was 36 years old, from a European background and living overseas. 

The husband was a wealthy Australian property developer with assets worth about $18 million dollars. 

At the start of the relationship, Mr Walter told the wife that she would need to ‘sign an agreement’ if they were to get married, and that his money was for his children, from his previous marriage. 

Ms Ivanov agreed and moved to Australia. The couple planned their wedding and Ms Ivanov invited her family from overseas to attend. Eleven days prior to the wedding, Mr Walter presented Ms Ivanov with a BFA and told her that if she did not sign the agreement, the wedding would be called off. She signed the BFA four days prior to the wedding. 

The terms of the BFA provided that the wife receive a payment of $50,000 after at least three years of marriage. 

The parties separated about four and a half years later. The wife sought relief from the Federal Circuit Court of Australia seeking an order that the BFA be set aside and that she receive a much higher amount. 

Ms Ivanov was successful in her application and the court found the financial agreement should be set aside for unconscionable conduct.  

MEET JEFF HEWITT

Jeff Hewitt is the head of MKI Legal’s family law team. Jeff is a senior family lawyer with over 16 years’ experience.

Jeff practises exclusively in family law. He has extensive experience in property and financial matters, parenting and children’s matters, de facto property matters, family law matters affecting same sex couples, superannuation splitting, spousal maintenance, divorce, child support, child support agreements, binding financial agreements, and consent orders.

Jeff is an experienced negotiator who takes great pride in resolving disputes and keeping people out of court as much as possible.

In his spare time, Jeff enjoys spending time with his family, playing guitar, reading, meditation, and supporting his beloved football team.

Jeff is a member of the Family Law Practitioners’ Association of Western Australia, the Law Society of Western Australia, and the Law Council of Australia (Family Law Section).