In the United States,a financial agreement between two people getting married or who plan to live in a de facto relationship is called a prenuptial agreement. However, the same legally binding contract is referred to as a Binding Financial Agreement (BFA) in Australia. If you wish to enter into a financial agreement with your partner, it is crucial to discuss the matter jointly before you engage a family lawyer. Here is what couples need to know about a binding financial agreement.
What Is the Agreement?
A BFA is an agreement signed between parties in a relationship. The financial settlement can be approved before, during an association, or at the termination of a relationship. In this sense, parties will declare their wealth, such as joint or private assets, and determine how the assets will be divided among themselves at the end of the relationship. Note that each party will have to be represented by their lawyer during the signing of the binding financial agreement. Having independent legal advice ensures that there is no misapprehension or risk of the contract being signed under duress by either party.
Honesty During Disclosure
In Australia, the Family Law Act governs the terms of the binding finance agreement. But because partners agree outside the purview of general law as it concerns relationship disputes, then they agree that the BFA will dictate their separation. When making the contract, each party should be honest about their assets and wealth, including gifts, inheritance and wealth from a previous marriage, if any. The agreement will often have schedules for both parties, which show what each person will be entitled to at the end of the relationship. In future, if evidence emerges that one party was being dishonest or withholding information during the negotiation, then the other party can contest the agreement in a family court.
Is the Agreement Beneficial?
Take, for instance, a situation where you have children from a previous marriage and plan to safeguard their future by preserving assets for their benefit. A binding financial agreement is just what the doctor ordered because by signing a contract with your present partner, you protect and preserve your wealth from claims by the other party. Besides, if couples have acquired significant assets and want to shield them, then they can find such a financial agreement useful if they separate from their partners. A binding financial agreement can protect couples from costly and lengthy litigation, which comes with emotional tension. Talk to a family law attorney to learn more.
Share16 August 2019
I work as a counsellor for couples going through a divorce. Obviously this is an emotional time and it is often a miracle that I manage to coax the former partners into the same room. There are two themes which occur regularly in my work. The first is that my clients often confess to throwing plates at each other. The second is the amount of money the divorce is costing because they cannot come to an agreement. Over the years, I have learnt that satisfied divorcees spend more time getting legal advice and making sound financial decisions than throwing crockery. In the course of my work, I have gained a considerable understanding of legal issues related to divorce. I share this blog in the hope that this knowledge will help you make sound decisions that lead to future happiness. I wish you all the best.