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4 Important Things About Binding Financial Agreement In NSW

30 July 2019/Binding Financial Agreement

Binding Financial Agreement(BFA) also known as prenuptial agreements. You use them to protect your assets when entering into a marriage or any defacto relationship. The Family Law Act 1975(Cth) details the rules to create a legally valid BFA.  This blog will cover 4 important things that you need to know before entering into a binding financial agreement in NSW.

1. How do they work?

BFA allows a couple to agree in advance on an acceptable division of assets when any relationship breaks.  It can reduce the financial stress of a separation and allow them to amicably separate without the need for costly, stressful and time-consuming court action. However, if you have a properly drafted BFA then it can prevent the court from interfering with the agreed property distribution. It can also provide certainty at the time of breakdown of a relationship.

2. Requirements

BFAs have some specific requirements. The Family Law Act 1975(Cth) lists these under section 90G. It includes:

  • Agreements should be signed by all the parties
  • Lawyers should provide a written statement that confirms legal advice was given
  • Each partner or spouse should seek independent legal advice
  • Both the parties should exchange the written statements
  • The court should not have set aside the BFA

The BFA will have no effect is these requirements are not followed. So you should get a family lawyer who will help you to itemize your assets and draft the BFA terms.

3. When should you use?

If you have some valuable assets, then BFA is for you. It is suitable for people with children from a previous relationship.  It includes:

  • Family trust property
  • Real Estate
  • Business or company ownership
  • Expected future inheritance of a value

4. What does a lawyer need to know?

When a lawyer is advising a party about BFA and before an agreement can be drafted. The factors that should be taken into account:

  • Parties occupations and future capacity to earn an income
  • Superannuation entitlements
  • Current assets including vehicles, valuables, furniture, shares, chattels
  • The current value of the assets
  • The current market value of the property a party intends to own personally
  • Details of each party’s liabilities like loans or debts
  • Whether they have any family law financial agreement that may apply
  • Date when the relationship and cohabitation commenced between the parties
  • Whether either party has been married previously
  • Number and age of any children

If you don’t have any valuable assets, then BFA is not suitable for you. BFAs don’t put a strain on your relationship. They can save you from the stress and uncertainty that accompany relationship breakdowns.

BFAs can provide significant comfort to parties before any relationship issues arise. It doesn’t only provide certainty if done properly but reduce costs and stress and also timely solution without having to experience the court delays as would occur if there was a prolonged argument between the parties. You can contact Matthew Buckley to find out if BFA is for you.

 

 

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