Binding Financial Agreement
A Binding Financial Agreement (BFA) is an agreement made between two people in a relationship or with third parties, setting out how they intend to deal with financial matters during a relationship and in the event of a relationship breakdown.
It outlines how a couple will manage their financial affairs during a relationship or after separation and can also deal with potential inheritances. Binding Financial Agreements can cover the division of property, superannuation and/or maintenance following the termination of a relationship or marriage.
In some countries, financial agreements are known as ‘pre-nuptial agreements’ commonly referred to as ‘prenups’ but can also include ‘post-nuptial agreements’ for agreements made after marriage or ‘de facto agreements’ for those living together in a relationship.
A BFA can be utilised by parties who plan to marry, are already married or have separated and can also be entered into by those who live together but are not married (de facto relationships) or before a de facto relationship starts. Binding Financial Agreements are suitable for heterosexual and same sex couples.
The purpose of a Binding Financial Agreement is to avoid the parties involved going to court to deal with the division of property if separation occurs.
What are the benefits of a Binding Financial Agreement?
The biggest benefit of a BFA is that it can provide clarity and certainty to both parties in a relationship and can extend to their families too.
Parties will reach an agreement on, in the event of separation, the division of property, assets and spousal maintenance. Entering into a BFA is effectively risk-management for your relationship or marriage. By organising their financial affairs whilst both parties are happy in a relationship means it may be more likely to reflect an agreement that both parties consider to be reasonable.
Whilst costs can vary for , it is important to remember the cost of finalising property orders after separation in the event of a dispute can far outweigh the expense.
Whilst there has been an influx of DIY of cheap template packages online, they may not be legally enforceable and may not meet the legal requirements.
Each relationship is different and Daykin Family Law will work closely with you to understand your specific needs, next steps and likely outcomes in the event of a separation.
If you, or someone you know, is entering a relationship or marriage and could benefit from a discussion about whether a Binding Financial Agreement is right for them, please contact us for an appointment at our office in Fortitude Valley, Brisbane.