A Property Settlement Agreement, more commonly referred to as a Binding Financial Agreement (BFA) in Australia, is a practical and effective method for officially documenting the distribution of assets and liabilities following the dissolution of a marriage or de facto relationship.
This agreement enables a couple to outline their agreed terms for an equitable division of property, rather than leaving such determinations up to the Court.
Sometimes separating couples put off the process of finalising their property settlement until they need to buy another house or transfer the title on the family home. Then they find out they need to provide their financial institution with paperwork documenting their Property Settlement such as a binding financial agreement, consent or court orders. Such a requirement can cause unexpected pressure and distress, particularly if the new property purchase is already underway and there are tight deadlines involved.
How to decide on the division of Property
When deciding on the division of shared assets and liabilities, it’s important to consider:
- The total value of all assets, including superannuation, and any related debts;
- Direct financial contributions or investments such as property renovations and improvements;
- Indirect, non-financial contributions, like child care, household maintenance, or partner support;
- Any gifts or inheritances received;
- The future needs and requirements of each individual.
There is no universal formula for dividing property; instead, the distribution will depend on the specific circumstances of the couple. Addressing the factors listed can assist in reaching a fair and mutually satisfactory property settlement.
Couples can finalise their property and financial arrangements in several ways:
- By creating a Property Settlement or Binding Financial Agreement, which is a confidential and legally binding contract between the parties;
- By submitting Consent Orders to the Family Court for ratification;
- By applying for Court orders in cases where mutual consent is not achievable and where the court will decide based on the information presented.
When both parties concur on the division of property and financial matters, this consensus can be encapsulated in a Property Settlement Agreement aka Financial Agreement.
These Agreements are constituted under the Family Law Act and offer a conclusive resolution for both parties without the need to engage in court proceedings. They serve as an alternative to litigation.
Should an amicable arrangement be challenging to reach, court intervention to obtain orders might be the only recourse.
Accessing a Property Settlement Agreement
A Property Settlement Template or Financial Agreement is particularly pertinent when a married or de facto couple decides to part ways and seeks to formalise the division of their assets, debts, property, and maintenance obligations. You can see what a Property Settlement Agreement or Separation looks like on this page.
For de facto couples, whether heterosexual or same-sex, who are not married, a Property Settlement or de facto Separation Agreement under section 90UD of the Family Law Act is still achievable. Divorced couples can formalize their property settlement using section 90D.
Our comprehensive Property Settlement or Financial Agreement Template for Separation is designed in accordance with section 90C of the Family Law Act 1975, offering all the necessary instructions to create a legally binding and protective Property Settlement Agreement.