Binding Financial Agreement
Binding Financial Agreement
What is a Binding Financial Agreement?
A Binding Financial Agreement, or “BFA”, is a legally-binding agreement between couples before, during or after their de facto relationship or marriage.
A Binding Financial Agreement usually details what will happen to the couple’s individual and joint assets and liabilities both during the relationship or marriage and in the event the couple separates.
For example, a Binding Financial Agreement can detail what happens with the income you and your spouse earn, who is responsible for paying the mortgage, rent or other expenses and what happens to any assets or debts you have now or accumulate in the future. A Binding Financial Agreement can even cater for certain events that could happen in the future such as if you have children or if one of you can no longer work.
I’m thinking of getting married or entering into a de facto relationship – should I get a Binding Financial Agreement?
You may consider entering into a Binding Financial Agreement before you enter into a de facto relationship or marriage. This is also known as a pre-nuptial agreement or “pre-nup”.
It is particularly important to consider entering into a Binding Financial Agreement if you own significant assets and want to protect these assets from a potential claim from your spouse in the event you separate. Without a Binding Financial Agreement in place, the assets that you have built up through a lifetime of hard work, or assets that have been generously provided to you by your family could be subject to a claim from your partner in the event you separate.
If you have children from a previous relationship or marriage and you want to provide a safety net for them, entering into an appropriate Binding Financial Agreement will ensure that your assets go to your children in the event you separate from your new partner.
No one enters into a relationship or marriage anticipating that it won’t last. Unfortunately, separation is a reality faced by many couples. Therefore, it is prudent to enter into a Binding Financial Agreement to protect your assets in the event you and your spouse separate. Having a Binding Financial Agreement can give you the peace of mind and clarity as to what will happen to your assets and finances in in the event you and your spouse separate.
I’m currently in a de facto relationship or marriage, can I still get a Binding Financial Agreement?
Even if you have already entered into a de facto relationship or are already married, it is not too late to enter into a Binding Financial Agreement with your spouse during your relationship or marriage.
It is usually much easier and less stressful and less costly for couples to make decisions about their financial matters when things are going well in the relationship. Therefore, if you are thinking of entering into a Binding Financial Agreement, it is better not to wait until things become rocky to enter into an Agreement with your spouse. A Binding Financial Agreement could be a worthwhile investment, considering the potential cost, stress and emotional toll of being involved in court proceedings if things don’t work out with your spouse.
What if I have already separated from my partner?
If you have already separated from your partner, you may want to enter into a Binding Financial Agreement as a way of entering into a legally-binding property settlement with your ex-partner. This method of entering into a legally-binding property settlement is different from entering into Consent Orders, as it is a private agreement between a couple and does not need to be approved and made by a Court.
Couples who are thinking of entering into a Binding Financial Agreement must each receive independent legal advice before they enter into the Agreement and complete a certificate stating that they have received this advice. Each of the spouses’ lawyers will also need to complete a certificate stating that they have provided this advice to their clients.
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Binding Financial Agreements
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