Are you looking for a way to lay the foundation of your relationship on concrete and all-round understanding? Are you someone that would rather take a loss than suffer conflicts? Or if you have survived a complicated break-up, it is natural that you are anxious to avoid such a crisis again. No matter how legitimate they are, your anxieties about ‘moving too fast’ or not having the right financial control do not have to stop you from living your best life, and neither do you have to risk your living standards and possessions for it. No matter what stage your relationship or marriage is in, a binding financial agreement could be the milestone that gives you a sense of progress.
A binding financial agreement (BFA) is essentially a written undertaking between a couple regarding the financial aspects of their partnership, including the division of assets and liabilities. BFAs ensure that both partners know and agree on how the assets are to be divided in case of separation, giving you swift, uncomplicated and out-of-court solutions that can save a lot of trouble during a difficult time.
A binding financial agreement helps a couple come to an understanding of the ownership of assets and of the financial aspect of their partnership. It keeps a record of the division of assets, the share of debts and liabilities, etc. It also mentions any expectations of inheritance or gifts that a partner might reasonably hold. It can provide you with the security of knowing how the assets will be split in case of separation and can avoid potential conflict in the future or in case of separation.
Based on the time when they are signed, binding financial agreements are broadly four types. The most common are pre-nuptial agreements that a couple signs before getting married. Then there are the cohabitation agreements that couples get before moving in together, and this can help in setting order issues like each one’s share in rent and living expenses, etc. The third type is the postnuptial agreement which is signed by a married couple that feels the need to get one, or a couple that wishes to terminate an existing older contract and sign a new one. Then there are the separation or divorce agreements, which you may draw up to mediate and simplify the legal aspects in case you are separating.
A binding financial agreement is not only a fair and positive way to set your own rules at the beginning, but it can also provide a sense of comfort, especially if you have experienced a difficult incident of separation in the past.
In most scenarios where the assets have to be split due to separation, the binding financial agreement can save you a lot of trouble. The assets may be divided without dispute, and it saves you from several difficult conversations and scenarios. It can avoid unnecessary arguments in a relationship or even after the relationship has ended and if you are not comfortable confronting somebody for your possessions, it gives a legal way for you to smoothly address the matter. A binding financial agreement is an effective legal tool that ensures seamless asset handling, and it can even be combined with other financial tools to direct inheritance and more.
As the significance of a binding financial agreement is subject to context and differs from person to person, the ‘worth’ of a binding financial agreement may also differ from person to person. However, it is always of some value, to have a binding financial agreement in place. Having complicated issues like finances already sorted out will go a long way in keeping separations civil and oftentimes, faster and easier. There is also the benefit of not worrying about ‘what ifs’ as you know your finances are secure no matter what.
While you will be able to do several steps of writing a financial agreement, it only becomes binding when both parties have had legal counsel separately regarding their rights – a lawyer has to even give you a certificate stating that you have had this counsel. The contract itself also has to be legally scrutinised to make sure it is not biased or fraudulent before being signed. In short, it may not be a legally binding contract if you draw it up by yourself.
One of the first things about a binding financial agreement is that it has to be in writing. Furthermore, it has to be written in clear and definitive language that leaves no room for confusion or contest in future and refers to the right sections of law. Both parties have to sign it after having received individual legal counsel. Binding financial agreements are also attached with legal evidence in form of certification that both parties have received the mandatory legal advice.
As already mentioned, a financial agreement becomes a binding contract only if it has been supervised by an authorised legal professional. To begin with, both parties need to seek individual lawyer’s counsel, where they will be advised of the scope of the agreement they are about to sign. Getting a practised legal professional to draw up the contract will further ensure the validity of the contract, and ensure that the language is clear and the terms mentioned enforceable.
A BFA can be signed between two legal adults to define the ownership and division of their shared assets and liabilities as a couple. It cannot be enforced on a third party. Family law recognises no other restrictions in eligibility to participate in a binding financial agreement.
You may enter a binding financial agreement at any point in a relationship. The earliest you may get one is once you have decided to move in together. You may sign a cohabitation agreement if you are already living together but would like to further strengthen the situation through a written agreement. You may get a pre-nuptial in case you are planning to get married and you may draw up a contract or update an old one even after you are married.
A binding financial agreement is seen as one of the lesser contracts but has a lot of weightage when it comes to dispute resolution. You can avoid going to court to solve a dispute regarding your property and you will have a reasonable understanding of what your partner will consider reasonable. It can be your safety net and in the best scenario, you never have to use it. Often, the process of getting a binding financial agreement helps you understand finer aspects about your partner, that you may not discuss in conversations. While the benefits of getting a contract are more than the actual execution, there are no scenarios in which you may regret getting one.
To begin with, a binding financial agreement can prove to be a tricky subject to talk about, and there is a plausibility of misunderstandings arising from one seeking it, especially if there is a disparity in the finances of the partners. While it may be essential, you may find the conversations about getting one to be complicated.
You will find that the laws regarding binding financial agreements are complicated – there are no separate regulatory authorities overseeing the process of signing binding financial agreements. While a binding financial agreement guarantees you justice if it becomes a case in court, it may be set aside in several situations.
If the execution of the agreement will cause hardships to a dependent, like the parties’ child, the contract has to be set aside on that consideration. The contract itself may have to be scrutinised against possibilities of fraud and to make sure that the intention of the contract isn’t unfair to either party. If the language used in the contract leaves room for interpretation or is misrepresentative or incomplete, it could be contested in court. To avoid such scenarios, it is always best to get the best legal help available while writing a binding contract. The costs of getting a BFA also have to be considered as the prices depend on the quantity of assets to be discussed and can vary a lot.
Often, binding financial agreement becomes a sensitive issue, especially if a partner is not predisposed to the idea of getting one. If you feel that your relationship has progressed to a level where it is important to set the financial details in order to help you sail smoothly to more meaningful levels in a reassuring manner, you should definitely explore if your partner also feels it is time to get a binding financial agreement. You have to be prepared to be open about every aspect of it, sensitive to any vulnerability and respectful of the doubts that your partner may present. Once you have indeed decided to get a binding financial agreement, you need to further discuss the finer details like seeking counsel individually or setting up lawyer appointments together.
There is no one quote-fits-all solution when it comes to BFA services as the needs of each couple and the assets involved vary from one to one. As with every service, the costs depend on the quantity of work and the time your lawyer spends in getting your job done, as well as any finer aspects that have to be addressed. The costs of getting a BFA may fall in the $2000-$5000 range, but only a lawyer can give you a comprehensive quote, after discussing your needs in detail. Get in touch with the friendly Maatouks Law Group team to discuss your needs and find out exactly how much your BFA preparation job will cost you.
When drawing up a binding financial agreement, it is a good idea to get the best available help to ensure that the job gets done smoothly and the veracity of the document is beyond question. Maatouks Law Group Services has been providing the most reassuring services in that aspect through our 30 years of service, and today we are the go-to experts in Sydney. We have 4 offices across Sydney – in Liverpool, Narellan, Penrith, and Sydney CBD, to ensure that you get the legal assistance you need in a convenient manner.
We are experienced in binding financial agreements and can help with all aspects of it. We can advise you on your rights and draw up the actual contract based on the inputs from, and agreement between both parties. In case the contract has already been drawn up, we can take a look at the contract to make sure there are no oversights. Call our friendly team today to begin your binding financial contract work and get a free first consultation.