Divorce can be a stressful and emotional time, especially when it comes to the division of finances. In Australia, couples who are going through a divorce must navigate the complexities of the Family Law Act of 1975, which governs the financial agreements made between separating spouses. Here’s what you need to know about financial agreement divorce in Australia.
What is a financial agreement divorce?
A financial agreement divorce is an agreement made between both parties that outlines how their assets will be divided once the marriage has ended. Financial agreements can be made before, during, or after the marriage, and can include properties, businesses, superannuation, and other assets. The purpose of a financial agreement is to provide both parties with a clear understanding of their financial obligations and entitlements, and to avoid lengthy and costly court battles.
Types of financial agreements
There are two types of financial agreements that can be made in Australia: Binding Financial Agreements (BFA) and Limited Financial Agreements (LFA).
A BFA is a legally binding agreement between separating spouses that outlines how their assets will be divided. The agreement must be signed by both parties and witnessed by a lawyer. Once a BFA is signed, it cannot be changed unless both parties agree to the changes in writing.
A LFA is a less formal agreement between spouses that outlines how their assets will be divided. Unlike a BFA, an LFA is not legally binding and can be challenged in court. However, an LFA can still provide some guidance for how assets should be divided in the event of a divorce.
Benefits of financial agreements
Financial agreements can provide several benefits to separating couples. Firstly, a financial agreement can provide both parties with a clear understanding of their financial obligations and entitlements, which can reduce the risk of conflict and misunderstandings. Secondly, financial agreements can help couples avoid lengthy and costly court battles by providing an agreed-upon framework for dividing assets. Finally, a financial agreement can provide couples with greater control over their financial future by allowing them to make their own decisions about how their assets should be divided.
In conclusion, a financial agreement divorce in Australia can provide separating couples with a clear framework for dividing their assets and avoiding costly court battles. Whether you choose a BFA or LFA, it’s important to consult with a lawyer experienced in family law to ensure that your agreement is legally binding and protects your financial interests.