The use of Binding Financial Agreements for asset protection.
The document that is commonly referred to as a Pre-Nuptial Agreement (or “pre-nup”) is just one version of the many types of Binding Financial Agreement (“BFA”) which can be entered into under the Family Law Act. BFAs can be entered into before a relationship commences, during the relationship or after the relationship ends. They can apply both to marriages and de facto relationships.
Particularly in the age of second marriages and blended families, many people wish to make an agreement with their partner while the relationship is still good as to what will happen to their property in the event that the relationship or marriage breaks down at a later date. The advantages to such an agreement are that the parties can avoid disputes over property and potentially expensive and stressful court proceedings at a time when they are also dealing with a relationship breakdown.
BFAs are highly technical documents which can be overturned in certain circumstances by the Court. It is imperative that they are properly drafted and that independent legal advice is given to each party before they sign. Matters such as duress, undue influence, a material non-disclosure of a party’s financial circumstances can all invalidate a BFA at the time you need it most, so it is vital that proper consideration and time is given to the agreement at the time it is made.
A BFA that is valid takes away the Court’s power to hear an application under the Family Law Act for adjustment of property interests. The parties can determine at the time of making the Agreement whether they wish to take away the Court’s power to determine a dispute about some or all of their property. Many BFAs also contain releases which prevent each party from claiming against the other person’s estate in the event of their death.
Having certainty and peace of mind as to how your property will be dealt with in the event of a separation or your death is important to a lot of people. It can help you with planning your financial future and protect the inheritance of your children.
If you wish to talk about asset protection and estate planning, please contact our office on 9976 5222.
Image credit: Wesley Tingey wesleytingey CC0 1.0
Read more Shipton & Associates blog posts here.
This information and information published on our website and social media sites is general in nature and for information and entertainment purposes only. This information does not constitute legal advice and should not be relied upon as such. If you require legal advice which takes into account your personal circumstances, please contact us for an appointment.