Financial Agreements – Asset Protection
Asset protection via a financial agreement entered during a relationship can remove the uncertainty involved in dividing assets after separation. The wealth one party or both parties have accumulated before marriage or cohabitation can be protected.
When can a Financial Agreement be arranged?
A financial agreement is often be referred to as a ‘BFA’ or Binding Financial Agreement or cohabitation agreement. Where they are being considered for asset protection, parties can sign a financial agreement before marriage or cohabitation, or during marriage or the de facto relationship.
What is the effect of the Financial Agreement?
A financial agreement allows parties to ‘contract out’ of their ability or right to initiate a property settlement through the Court system if they separate. Existing assets, liabilities and superannuation benefits are quarantined and are referred to as ‘Separate Property’ in the agreement.
At Parry Coates Family Law are team will discuss with you the specific terms of your financial agreement. Each agreement is tailored to your and your partner’s needs and intentions. A legally binding agreement allows you to outline how, in the event of separation, your assets, liabilities and superannuation benefits are divided.
Legal Requirements of a Financial Agreement
To be legally enforceable, the financial agreement must meet the mandatory requirements under the Family Law Act. These include:
Each party must have independent legal advice
Each party’s solicitor must sign a statement stating that legal advice was given before the agreement was signed
The agreement must have been entered into freely, with full financial disclosure of each party’s assets, liabilities and superannuation benefits