If you're ready to get married, you might be asked to enter into and sign a binding financial agreement (BFA). But what is a BFA and why is it important? Here’s some information about what a BFA is, how it works, and why it could be in your best interest.
What is a Binding Financial Agreement?
Simply put, a binding financial agreement is a legal document that can allows parties to manage their property and other assets if their relationship breaks down, preventing what could be otherwise a long and painful divorce. It was introduced on 27th December 2000 under the Family Law Act 1975 and includes prenuptial agreements, postnuptial agreements, and cohabitation agreements.
When can I enter into a BFA?
You can enter a BFA before the start of a marriage or de-facto relationship. You can also enter a BFA at any other point during marriage/relationship or after it.
Why do I need it?
It protects your assets.
One of the main advantages of signing a BFA is that it allows you to potentially avoid big legal disputes later on. A BFA can protects the separate assets you had prior to marriage. Should a divorce happen, you won't need to provide evidence of how you came to own something.
It protects children.
A BFA is a good way to ensure your children do not lose their inheritance in the event of a divorce. This also applies if your partner has an heir/heirs from a previous marriage.
It can prevent debt.
Apart from dividing assets, a BFA can also assign debts to regulate losses. You can include a clause stipulating what happens to any debts that may have incurred during the marriage.
What does a BFA cover?
Apart from property and financial assets, a BFA may also cover the following:
- Spousal maintenance
It is important to note that a BFA may slightly be different for de-facto couples as there are less financial matters that may be covered for them. For example, a BFA doesn't cover the maintenance of a party during the de-facto relationship.
Do I need to hire a lawyer?
If you are in a de-facto relationship and are considering a BFA, it is best to talk to a family law attorney in Cairns who can give proper advice and handle other related legal matters. While you can draft your own agreement, BFAs are a complex documents that must comply with legislation.
Marino Lawyers has family law attorneys ready to assist you with creating a BFA. We have offices located in Cairns, Edmonton and Port Douglas with visited offices at Gordonvale and Babinda. For enquiries, please don't hesitate to call us at (07) 4081 6700.