Whether you and your partner are just starting your lives together or have decided to separate, BFAs are instrumental in ensuring that you are able to decide how yours and your partner’s finances, property and financial resources are protected, or divided, without the intervention of a courtroom.
Therefore, it is so important to get it right.
Binding Financial Agreements
Many BFAs have been set aside on the basis that the document does not adhere to the requirements in s 90G of the Family Law Act 1975 (Cth). This section prescribes that the document will be binding on all parties if:
- The agreement is signed by all parties;
- Before signing the agreement, each party was provided with independent legal advice from a lawyer about the effect of the agreement and the rights, advantages and disadvantages of the parties entering into the agreement;
- A copy of a statement of independent legal advice is given to the party that received the advice;
- The agreement has not been terminated or set aside from the Court.
Throughout this framework, the importance of independent legal advice is highlighted to ensure that the parties are entering into the agreement fully informed and avoiding any ambiguity as to their rights and obligations.
The Family Law Act prescribes that legal advice provided to clients includes the following:
- That you understand the effect of the agreement upon your rights to property and finances;
- That you understand the advantages and disadvantages to you when signing the document, considering your contributions to the relationship, the contributions brought into the relationship and your current financial resources.
Therefore, the initiating partner engages an experienced solicitor to draft the BFA. Once the client is happy with the BFA it is provided to the other partner in order that they can seek a solicitor to provide Independent Legal Advice.
BFA Checklist of Information and Documents
Type of Information:
Tick Box
2 X ID documents:
• Drivers License
• Passport
List of all Assets:
• Property Holdings – National & International
• Shares
• Cryptocurrency
• Jewellery
• Vehicles
• Bank Accounts and Balances – last 3 statements
• Superannuation Funds – last Statement
• Other
Lust of Debts:
• Mortgages
• Lines of Credit
• Loans
• Credit Cards
• Other
Special Instructions:
• Who is keeping what
• What other issues need to be included
• What will be considered joint assets
Two Tier Independent Legal Advice
On consideration of these matters, and further case law, it becomes evident that the requirement of independent legal advice is two tiered.
That is, not only must the advice be substantive, and exhaustive, but it must also be independent. Failure to do so could have disastrous consequences and could lead to the BFA being set aside.
There are also other reasons why the Court may allocate that a BFA is void and unenforceable. These include, amongst other things, unilateral mistake, undue influence, misrepresentation, and unconscionability.
Independent legal advice is also two tiered in that the solicitor drafting a BFA must advise you that your partner/ex-partners must engage Independent Legal Advice on a BFA that has been provided to them for signing.
Digital Age Lawyers and Independent Legal Advice
Irrespective of which role you engage us for, drafting or review of a BFA, we ensure that our independent legal advice adheres with the approach taken by the Courts and the Family Law Act. Specifically, we ensure that:
- The advice given is independent, substantive, and covers how the agreement will affect you personally; and
- That the advice is independent in nature;
- That the certificate of advice is duly and correctly signed.