BINDING FINANCIAL AGREEMENTS (BFA)
The beginning of a relationship is always an exciting time and in that moment it can be hard to imagine the possibility that things might not work out as planned. Unfortunately, with the realities of modern life, relationships do not always work out and often couples are left trying to deal with dividing their assets while also enduring the emotional turmoil that comes with a separation or divorce.
What is a Binding Financial Agreement?
A “Binding Financial Agreement” or “BFA” is popularly known as a “prenup”. A BFA is an agreement made between two people as to how their assets, financial resources and liabilities will be divided in the case of the relationship breaking down or having already broken down. By entering into a BFA both parties essentially contract out of their right to refer their situation to the Family Court to decide the division of their assets.
Why should I have a Binding Financial Agreement?
Contracting out of a right may seem foolish on its face, however, couples left contesting bitter court battles are almost always left wondering what could have been had they had the foresight to enter into a BFA. Nobody has a crystal ball, so having a BFA in place leaves you with peace of mind that if your relationship does break down, you and your loved one will not have to endure any unnecessary conflict or stress at what will already be a highly emotional time in your life.
While many of us (or should I say some?) are sensible enough to continue to make reasonable judgements when tensions are high, many couples find that during a separation these qualities go seemingly out the window. One of the key benefits of a BFA is that making such an agreement when both individuals are happy together can often mean the agreement is more likely to reflect what both parties would consider reasonable and fair to one another.
Aren’t these Agreements only for the rich and famous?
Anyone who has ever been involved in court proceedings will tell you that it is not only stressful but also extremely EXPENSIVE!! The old saying that “no one wins but the lawyers” is spot on when it comes to court battles to divide property.
No matter how much your assets are worth, having a BFA in place is almost always a more cost-effective solution than trying to negotiate a settlement after your relationship has already broken down, or worse yet having the matter taken completely out of your control and the court deciding on the division of your property.
Some people liken a BFA to having a kind of insurance. It can be a safety net that will provide you with clarity and peace of mind knowing that it is
Who can enter into a Binding Financial Agreement and at what stage should it be made?
A BFA is available to all couples whether they are:
- Married or intending to marry;
- Heterosexual or same-sex de facto couples; or
- Cohabitating or intending to cohabit.
BFA’s may be entered into at any stage of a relationship, be it at the beginning or during a relationship, or even after a relationship has already broken down.
For more information or advice please call our Family Lawyers – it is never too late to protect yourself and your loved one!
Contact us today to arrange an appointment to discuss your requirements or call 4946 6670.