No matter what type of relationship or at what stage you’re in, a Binding Financial Agreement (BFA) is the best protection from lengthy and costly litigation in the event of a separation.
When prepared correctly, a financial agreement is legally binding, and can protect your current assets such as property, intergenerational wealth or shares, and future assets such as inheritance.
Introduced in Australia in 2000, a BFA allows de facto, married, soon-to-be-married and same-sex couples to enter into a legal agreement that protects their assets in the case of a relationship breakdown.
There’s a little bit more complexity to a BFA than meets the eye. Parties must each obtain independent legal advice as to the advantages and disadvantages to themselves at the time of entering into the agreement AND each person must have the solicitor who gave that advice sign an Independent Solicitors Certificate of Advice annexed to the BFA (the parties themselves already having signed it) at which time the BFA becomes binding.
To make matters more complicated, a BFA of any sort can also be a “superannuation agreement”, “spousal maintenance agreement” or even a “puppy prenup.”
Because each situation is unique, there are different types of BFAs:
- Before living together (legal jargon: pre-cohabitation agreement) or before a de facto relationship (S90UB Financial Agreement)
- During living together (legal jargon “cohabitation agreement”) or during a de facto relationship (legal jargon: S90UC Financial Agreement)
- After separation, but before divorce (“during marriage”) or after the breakdown of a de facto relationship (legal jargon: S90UD Financial Agreement)
- After divorce
You should also be aware of future circumstances such as having children in the future. Failing to add this to your BFA can result in the document being overturned.
Protecting your future and avoiding uncertainty is worth entering a BFA. And you don’t have to navigate this alone. That’s what we’re here for.