What is a BFA
A Binding Financial Agreement is an agreement about your finances and property that is binding with another person.
Also known as a Prenuptial Agreement or Co-Habitation Agreement, a Binding Financial Agreement can be entered into before moving in together, when assets change during a relationship, or even after the relationship ends.
To be binding, the agreement needs to be in writing and signed, must be fair and not overly oppressive or disadvantageous to either party, and both parties must have independent financial advice.
Marital Assets
When two people get married, their assets become part of the "marital pool". That means that both parties have a right to the joint property upon separation, regardless of who brought the property into a relationship or who's name it is in.
Not getting married but moving in with someone? A marital pool can be created even during a de facto relationship.
A marital pool can be made up of real estate, superannuation, shares, trusts, assets, and even businesses.
If you receive an asset during a relationship, such as an inheritance or gift, this property will also go directly into the marital pool without a BFA.
Why you need a BFA
If two people are young and don't have many assets, and have the intention to make a life together, then it might not seem obvious that they need a BFA. However, a lot can change over the years that a couple is together, and it's good to have a plan for what will happen if a separation takes place.
Legal Costs during property settlements can run into the hundreds of thousands of dollars with lawyers who charge by the hour (not with us, as we offer fixed-price packages).
The time taken to resolve a property dispute can also run into months or years.
Would you prefer to have a BFA that simply sets out what will happen in the case of a separation, or risk paying hundreds of thousands of dollars and months of your life to finding out?
Buying a house? ​If you are buying the property with your partner, it’s a good idea to protect your interests with a Binding Financial Agreement.
You or your partner might be intending to contribute more to the purchase with a deposit, or payment of the mortgage. If the relationship breaks down, you want to make sure you can recover your investment fairly at a reasonable cost.
A BFA will out what happens to the property if the relationship breaks down (e.g. separation or divorce) and how much of the asset you are entitled to (which may not be clear if you buy the property as joint tenants).
Consider entering a BFA together when you:
- have more assets than your partner at the beginning of your relationship;
- maybe entitled to an inheritance or gift;
- operate a family business or investment that you need to preserve;
- want to avoid going to court later & minimise legal costs; or
- already have children who need to be protected financially.
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Van Beveren Lawyers offer cost effective Binding Financial Agreements from $2750 incl GST, and Conveyancing Packages from $935 incl GST. Contact us today for a free complimentary 15 minute call.
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