Separation Agreements (Section 90C/D/UC/UD of the Family Law Act 1975)
A Binding Financial Agreement, or BFA, is a written agreement between a couple as to how they propose to deal with financial matters both during the relationship and in the event of a separation. A BFA will typically provide how the parties propose to operate in respect of financial matters, as well as how specific assets are to be divided.
BFAs may be written by people before or after they get married, or before or after they begin a de facto relationship, and even after they separate. BFAs are fully recognised by the Family Court, the Australian Tax Office and the offices of State Revenue.
The Financial Agreement:
(1) Needs to be in writing; (2) Needs to clearly identify you and the other party; (3) Needs to express that it is made in contemplation of the irretrievable breakdown of a relationship; (4) Needs to set out in detail both yours and the other party’s financial positions as a result of the division of assets and liabilities – full disclosure is required; (5) Needs to set out in detail what you seek to happen to arrive at the proposed division of assets; (6) Needs to include a certificate from each party’s solicitor annexed to the agreement that the relevant legal advice was provided to that party.
Obtain Independent Legal Advice
It is essential that you obtain independent legal advice from 2 solicitors – one for each party – and that those solicitors each certify the agreement: (1) The agreement will not be supported in the Family Court if the agreement is not certified by 2 independent solicitors; and (2) If the agreement is not certified, it may not meet the Office of State Revenue requirements, and as a result, there maybe tax or transfer duty payable if there is a transfer of real estate from one party to the other as a term of the agreement.
You should both sign the Agreement at the same time and your signatures should be witnessed by an authorized person (JP or solicitor) – you may wish to have the solicitors who advised you to act as authorized witnesses.
IMPORTANT: To ensure that your separation agreement is fully compliant and enforceable under the Family Law Act 1975 (as amended) each party is required to obtain independent legal advice and a solicitor’s certificate to that effect.