binding financial agreement

How Does A Binding Financial Agreement Work?

Life is uncertain and by being realistic about it and planning before a problem occurs; you can avoid a lot of issues in the future. Binding financial agreements are those contracts which are made before, during or after the course of a relationship. It is based on the planning of finances and asset division if the relationship falls apart.

These agreements are made between people before, during, or after a de facto relationship or marriage; the de facto couples can be of same or opposite sex. Although a lot of people frown upon such agreements; they may save you from a lot of legal troubles.

Types of BFA

There are five types of BFA in all, which include: Prenuptial Agreement, Postnuptial Agreement, Cohabitation Agreement, Separation Agreement, and Divorce Agreement. These are applicable, depending on the type of relationship you are involved in. Prenuptial and Postnuptial Agreements are for married or intending to marry couples, whereas Cohabitation Contracts are for de facto couples who live together or are intending to engage in a live in relationship.

The Separation Agreement is for both married and de facto relationships who want to break up and live independently; whereas Divorce Agreements are made between divorced couples for property settlements. The Family Law Act 1975 covers BFA and the agreements and sections are similar for same and opposite sex couples.

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Sorting Out Finances for Cohabiting Couples

If you are living in a de facto relationship, as many other couples around the country are, you might think that there will never be need for lawyers. After all, Davies & Co Lawyers tell us that without the formal agreements that come with marriage, everything you own is yours alone, right? This is a dangerous way to think, because you do not need to be married to be at legal risk, when it comes to your finances.

Couples who have been classified as de facto have a lot of the same rights as married couples, when it comes to separations. In fact, property settlements are largely similar, whether you are married or just cohabiting. This can even extend to the division of superannuation, and spousal payments.

Many people are not aware that they are living in a de facto relationship. When two people are in a relationship, and they live with one another in a domestic sense, they can be considered to be de facto. However, it does get a little more complicated than that. Couples who are not actually living together full time might still be de facto. When at least one person in the couple is still married to another person, or one or both of them are part of a de facto relationship with another person — they can still be considered de facto with the first mentioned person.

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