Options For Financial Separation

Indicative Costs & Approach

Take advantage of our commercial and financial expertise in considering your financial separation options.

There are 3 options when undertaking financial separation as follows.

1. The BFA (Binding Financial Agreement)

Also known as a prenup or postnups. Some further interesting aspects of BFA’s are dealt with below and also on our step one page. These are usually the starting point for any agreement. They allow the parties to agree whatever they wish provided that each retain separate lawyers and make full disclosure. Many lawyers are uncomfortable with these but we have a unique approach because of our diverse financial and commercial expertise that goes beyond family law.

2. Consent Orders.

These are made by consent of the parties and an application in Court. As they are court orders, the court is restricted and must only make orders which are fair and reasonable and reflect what the parties would get if indeed there did go to court and have a dispute. In other words, you cannot just agree to whatever you like. You must go through the steps of contributions and future needs. Nonetheless, these are an alternative to option one. We commonly use these where parenting orders are also sought.

3. Court Action. No Agreement

We go to court and seek contested orders. Even where we may end up here at option three, our initial approach is to try and make a settlement offer in the form of a BFA or consent orders. This is known as a letter of offer. We cannot simply just go to court but must demonstrate that we have taken “genuine steps” to resolve the dispute. Where there is no agreement, or typically you have spouses that hide assets, our financial expertise is unparalleled in chasing and hunting down hidden assets or unreasonable spouses.

This is the final option and we always recommend to clients to try and resolve the matter before the court process ends. You will have plenty of opportunities to go to mediation but sometimes it takes going to court before the other party becomes reasonable.

Our Senior Family Lawyers

Jaswinder (Jas) Sekhon

Jaswinder (Jas) Sekhon

Managing Director

Jaswinder has a fresh revitalizing approach to law which has led to outstanding results. Admitted to practice as a solicitor/barrister in four countries, with over 30 years’ experience in wealth, finance, tax, trusts, funds, and structures. Jas equally enjoys strategic work for clients in disputes, emerging, criminal or family law.

Jennifer Cheal

Jennifer Cheal

Senior Associate/Practice Manager

As the practice director, Jennifer is a consummate professional and simply an outstanding lawyer. She has a great eye for relevant detail and yet also a wonderful sense of perspective in devising and implementing legal strategies.

Difference Between BFA & Going To Court?

  • If you decide to use a BFA, both of you will need to get independent legal advice. You can get your lawyer to give you legal advice and draft up the BFA and your partner can have their lawyer review the BFA and provide them with legal advice.

  • A BFA can only deal with financial or property matters whereas consent orders can deal with parenting matters as well.

How Certain is a BFA ?

Many lawyers are reluctant to draft BFA and prefer to use consent orders for financial separation matters between couples that are in agreement.

This largely stems from a number of court decisions where BFA’s have been set aside or varied. It is important to note that the BFA is a technical document that must refer to certain sections of the Family Law Act; but more importantly the document must be drafted in a way to consider what may happen in the future between the parties.

It is not as simple as filling in the blanks. It is important to use experienced senior lawyers that understand financial and asset protection matters can advise you properly on a BFA.

Grant Hackett-Wife Sets Aside BFA

  • Hackett’s lawyers prepared a pre nup (BFA) rior to his marriage to Candice Alley.

  • The agreement was later amended during his wife’s pregnancy with their twins.

  • According to the newspaper article at the time

  • “Hackett sued the two law firms over the allegedly botched agreement, claiming their negligence caused him financial loss because it was found to be not binding.”

  • Both law firms denied negligence and earlier this year the case was settled privately between the parties.

  • Candice Alley claimed that that she did not receive the appropriate legal advice before signing the agreement; and the way in which the agreement may have been modified at a later date.

Grounds for Setting Aside a BFA?

  • Misrepresentation or fraud

  • To establish fraud can involve some failure to disclose something a court considers relevant to enter the BFA.

  • Misrepresentation; it must be shown that there was a false statement that effectively induced the other partner to enter into the BFA.

Change of Circumstances - Children?

  • Any circumstantial changes relating to the best interest of the child or children that the court regards as “material”, such as wellbeing, child development and health are paramount when the court considers setting aside a BFA.

  • For instance, when the BFA was entered into, the child may have originally lived with the mother, but later moved to live with the father. This might form grounds for the court to set aside the BFA.

  • If the child becomes disabled or sick requiring expensive medical treatment, the BFA may be set aside if it runs contrary to the interests of the child.

Fraud Against 3rd Parties Such as Creditors?

  • For example, if assets are transferred prior to a BFA prior to bankruptcy in circumstances the trustee in bankruptcy and/ or the family court may investigate and set aside the BFA.

Uncertainty and Incompleteness?

  • Impracticability

  • It would be unreasonable to enforce the agreement and so a court will have it set aside.

Improper Pressure, Duress and Stress?

  • Unwarranted pressure on the other partner to take part in a BFA. Violent threats, intimidation and bullying are common examples of undue influence and duress.

Splitting Orders and 'Unsplittable Interests'?

  • It will not, however, be possible to split a superannuation account with very little money.

  • Other types of interest have been deemed unsplittable.

Fair and Reasonable?

  • A court will only make orders on your consent orders if they think that what you
    have agreed on is fair and reasonable to both parties.

  • A BFA may not necessarily be fair to both of you and it is possible that you or your partner may have a more advantageous settlement.

  • A lawyer may also prepare a “Letter of Advantage/Disadvantage” when they review a
    BFA so that their client is aware of the effect of the BFA.

  • If a BFA is prepared without this independent legal advice, the BFA is void and
    unenforceable.

  • A “Certificate of Independent Legal Advice” is required to be prepared and signed to
    show that both of you have received independent legal advice.

Full Disclosure a Must?

  • In both cases the parties must disclose all assets, whether in their name or not, and liabilities. The documents may be overturned and contempt of court penalties may apply if full disclosure is not made.

What Assets are Covered?

  • All of the parties current assets, liabilities and financial resources are considered. This will include both parties superannuation and pension entitlements.

Liabilities?

  • Liabilities are also considered in the same way and they will include both parties, debts, credit cards, loans, tax and stamp duty obligations and that is irrespective of whether they are in joint names or the name of one party.

Property Includes

  • Any property held in one name;

  • Jointly owned assets;

  • Superannuation;

  • Business interests;

  • Shares or interests in a company;

  • Family trusts as well as other trust interests;

  • Funds or interests over which a party has either control or influence;

  • Assets owned prior to the commencement of the relationship or accumulated during the relationship;

  • Assets acquired post-separation; or

  • Prospective entitlements i.e. inheritances, redundancy payments and long service leave may even be included in certain circumstances.

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