What is the best way to protect what I already own, if I’m starting a new relationship?
by Lajita Allan-Agnew
One of the best ways of protecting property that you already own is to draw up a binding financial agreement (BFA) with your partner. This way, in the unfortunate event that you, as a couple, decide to break up and lead separate lives, each of you will have been protected and kept from exposing your assets and properties to certain risks, which in Family Law are devastating legal consequences, exorbitant legal fees and emotional stress. It is also a way to safeguard of your child’s/children’s inheritance and shields them from potential long and costly litigation.
Whilst you are in the process of drawing up a BFA, keep your finances separate, i.e. don’t combine your finances, don’t have a joint bank account and don’t enter any joint ownership. It is just as important for each of you to be responsible for your own individual debts and don’t involve or contribute towards your partners financial decisions. Whilst it may sound morose, ensure that there is no evidence of intent to provide for your partner in a will or as a beneficiary of your superannuation funds or life insurance policies. Finally, contribute equally to board/rent whether you are renting or boarding with family.
The next step is to agree to commit to the preparation and execution of a BFA, i.e. there must be no unconscionable conduct or duress. Next, employ legal practitioners who are experienced to draft the document for you because this is a complex area of law. Your lawyers will ensure that your BFA is prepared properly and that you both are providing full financial disclosure. Your individual lawyers will provide you legal advice and you should seek out the advice of your accountant for fiscal advice.
It must be said that nobody can absolutely guarantee that a BFA will be binding and completely enforceable legally, as the possibility of someone successfully applying to the Court to have an agreement set aside can never be completely eliminated.
That being said, having the BFA in the first instance, as well as reaffirming it annually and amending it (if applicable) to reflect any substantial major changes in your circumstances such as the birth of a child or loss of employment, can lessen the likelihood of court action.
Preparation, comprehensive planning and sound legal advice are key in ensuring your assets are protected. We at TBA Law can help you with questions surrounding the area of BFA’s and can assist you with the preparation of the document. For further queries contact us on 1300 043 103 to make an appointment in in any one of our offices located in Melbourne, Nagambie, Wallan and now in Seymour.