Binding Financial Agreements (BFAs), commonly known as prenuptial agreements, are becoming increasingly popular in Queensland and Australia wide, particularly among people receiving gifts from their parents to purchase their first home and those in second de facto partnerships or marriages.
When a couple initially starts dating, they are more likely to agree on things than when they break up. To save the misery and expense of going to court, as well as determining what you both believe would be a fair outcome in the event of a future separation, it might be useful to discuss your finances and a BFA/prenup at the start of your relationship.
BFAs differ from the prenuptial agreements depicted in television and movies. Contrary to what you may have seen on television, a binding financial agreement in Australia will not include provisions stating that you will receive nothing if you cheat on your partner or that you will receive more money if you have a boy rather than a girl.
Who should consider pursuing a BFA?
We frequently recommend financial agreements to customers who want to avoid future problems or, worse, legal disputes. Clients who own businesses and parents who want to leave assets or money to their children but are concerned about a potential claim from a spouse may find them quite beneficial.
Questions such as “what happens to my super if we split?” and “what do we think is fair if either of us receives an inheritance?” are among the subjects we recommend our customers discuss with their partners.
What is a postnuptial agreements?
People who are already married or in a de facto relationship can use BFAs, sometimes known as postnuptial agreements. Members of the LGBTIQ+ community can benefit from legally enforceable financial arrangements.
One of these prenuptial agreements (also known as postnuptial agreements) is founded on the premise that both partners should agree, while they are still cordial, on what will happen to their assets if they decide to divorce later, when they may be less pleasant.
Couples considering a BFA may use collaborative law techniques. This comprises holding roundtable conversations with the parties and their attorneys to determine what should be included in the contract as a whole.
Reviewing the Prenup agreement
In certain cases, the partners will sign a BFA at the start of their relationship, review it a few years later, then sign a new agreement as circumstances change (for example, after having children).
The parties must both seek independent legal advice and sign the Financial Agreement once it has been produced by a professional family lawyer and agreed by both parties. It becomes legally binding on both parties once signed. This means they cannot seek the court to distribute their assets differently and must adhere to the provisions of the agreement if they ever divorce.
A typical BFA would include that if the partners separate in the future, they will each keep anything they own in their individual names and divide anything they acquire jointly 50/50. These agreements may also specify that the parties are not entitled to each other’s inheritances or gifts from family.
Is it romantic? Maybe not. Is it wise and a means of avoiding additional expenses? Indeed.