Family Disputes settled with BFAs (Binding Financial Agreements)
Settling Property Disputes Can Be Easier Than You Think
There's no doubt that one of the many benefits of living in modern times is our increased freedom of choice – particularly in regards to relationships. No longer do we need to contend with betrothals/forced marriages or the stigma of divorce. We can choose who we want to live with and marry, and we can also choose to terminate those relationships at any time, without needing to worry about social consequences.
Unfortunately, we do still need to consider the impact of our relationship choices on our family and finances, and oftentimes, family disputes occur after a relationship breakdown that can have detrimental effects on all involved. When a family dispute goes as far as a Family Court decision, there is almost always one member of the family who is left feeling like they have lost too much.
While there are usually many aspects associated with a family dispute, one of the primary factors is finances. So, to mitigate disagreements with financial arrangements after a relationship breakdown, couples can opt for Binding Financial Agreements (BFAs) under Family Law.
What is a BFA??
A Binding Financial Agreement is a legal agreement made between members of a couple in a relationship, that determines the financial arrangement that is to occur during the term of the relationship or after the relationship ends. BFAs include:
- Pre-nuptial Agreements
- Cohabitation Agreements
- Post-nuptial Agreements
- Separation Agreements
- Divorce Agreements
These agreements can be made between same or different gender couples who are in a de facto relationship, engaged to be married or already married and can be implemented before a relationship begins, while the relationship is ongoing or even after the relationship ends. These agreements state in detail exactly how your financial resources, assets, and liabilities will be divided, so by agreeing to this contract, you’ll lose your right to dispute the division of these financial items in a Family Court after separating. This may sound like a negative, but the benefits of a BFA are substantial for some couples.
Why are BFAs so effective??
There are a number of advantages to entering into a BFA. These include:
- Allow you to move forward in a relationship, knowing that you and your partner both have genuine intentions and that one partner isn’t just entering the relationship for financial gain.
- Providing reassurance that you and your partner will receive equitable treatment financially, in the case of a separation – particularly where large assets are brought to the relationship by one member of the couple, but not the other.
- Ensuring that the arrangements made are determined at a time when you are both happy and thinking clearly, so that the agreement will be more likely to reflect what both of you actually want (as opposed to after the relationship ends, where tensions may be high).
- In some cases, a BFA will determine financial aspects of the ongoing relationship, such as how property will be acquired and owned, how regular income will be divided or used, how bills will be paid e.t.c.
- Implementing a BFA while the relationship is functional is always more cost effective than feuding in court over assets after a relationship has ended.
- A BFA allows peace of mind where one member of a couple has children or assets that they’d like to protect in the case of a relationship breakdown.
- BFAs can – in some cases – give separated couples relief from stamp duty and capital gains tax.
- BFAs can also be used in estate planning, to make sure property passes in the intended manner.
When are BFAs a good solution?
BFAs are good solutions for any couple in a relationship, who has more than $10,000 in combined assets. Regardless of how in love you are and how likely you think you’ll be to stay together long-term, things happen that can alter your intentions and cause financial disagreements. Setting up a BFA is similar to having health insurance, in that you don’t want or plan to use it, but it protects you in the event that you ever need it.
Who can I turn to when in need of a BFA?
When you’re arranging a BFA, you and your partner cannot obtain legal advice about BFAs from the same lawyer or even lawyers working within the same firm – each of you will need to seek independent advice from your own lawyer. When you do seek advice, your lawyer will also need to sign a certificate indicating that they have provided the advice in accordance with the Family Law Act 1975. You will also each need to sign your BFA in the presence of your own lawyer. The staff here at CM Lawyers are able to provide you with professional advice to meet your personal needs. We will ensure that you’ll be happy with your Binding Financial Agreement now and in the future.
You may be wondering what to do after you’ve decided you’d like to enter into a BFA. Many people are quite worried about how to discuss the matter with their partner, but in general, many of these fears are unfounded and partners are usually happy to sign. In fact, if a partner is worried their spouse doesn’t fully trust their intentions, a BFA can be a relief for them, as it shows they are in the relationship for genuine reasons! If, however, your partner resists the idea, we can’t really offer any advice, but we can help by answering as many questions as required to reassure you both.
Once you have both agreed to enter a BFA, you will need to utilise the service of lawyers, as you cannot proceed without proof you have each obtained independent legal advice. There are less expensive DIY financial agreement kits on the market, but we strongly advise against these, as BFAs are generally very complicated and require careful wording to ensure no loopholes are inadvertently created. Instead, it’s always prudent to use a quality lawyer for each member of a couple to both advise and draft a BFA. This ensures thoroughness, accuracy and will prevent ambiguities later. The extra expense may seem excessive in comparison, but just remember that BFAs are like any other insurance, securing your assets just in case.
Binding Financial Agreements are an easy solution to what can become a complicated problem. If needed, they can save you a great amount of time, money, and emotional expense. Please contact us today for more information on BFA's.