To discuss with your loved ones about your financial assets in the event of a relationship breakdown may seem inappropriate at first. However, though awkward it may appear on the surface, for many, protection of the hard earned assets and financial resources for themselves assumes paramount significance before entering into a new relationship. It is from this standpoint that legislation was enacted in 2000 permitting parties to a relationship to enter into a financial agreement between themselves specifying how the property is divided in the event of a breakdown of a marriage or a de facto relationship. This is what known as Binding Financial Agreement. By entering into a Binding Financial Agreement, you are effectively taking control of your property and maintenance obligation.
When a Binding Financial Agreement Can Be Entered Into?
A Binding Financial Agreement can be entered into before entering into a de facto relationship or marriage (this is what commonly known as pre nuptial agreement), during the marriage or de facto relationship or after the separation.
Benefit of a Binding Financial Agreement:
A Binding Financial Agreement can protect your assets acquired by you prior to you entering into a relationship with your partner. Of particular importance if you are entering into a second marriage and you had children from your previous relationship, then you may want to ensure that your children from the previous relationship are adequately provided for in the event of a relationship breakdown with your second partner. On the other hand if you are expecting to gain inheritance during your relationship, it is possible to safeguard your assets through properly drafted clause in the Binding Financial Agreement. Imagine the cost, stress and uncertainties associated with litigation over matrimonial assets. A Binding Financial Agreement can save you from the emotional, financial and mental stress during the difficult time of relationship breakdown.
Legal Requirements for a Financial Agreement to be Binding:
For the financial requirement to be binding the following requirements must be met:
- The agreement is signed by all parties
- Each party obtains independent legal advice before signing the agreement and this needs to be reflected in the agreement itself
- Each legal practitioners for both parties sign a certificate of independent legal advice and annexes it to the agreement
In certain circumstances a financial agreement can be set aside. If you are interested about safeguarding your property by entering into a Binding Financial Agreement, you can contact K Group Legal for professional assistance.