Ask anyone who has gone through a divorce, and they will tell you that it can be a pain. Talking to lawyers day in and day out will take a toll on you emotionally. It can drain your wallet in high service fees as well. At the end of it all, you may just want to settle and give your partner whatever she wants just to get it over with.
Australia’s Family Law Act of 1975 allows for married couples as well as those living together, known as de facto relationships, to create a legally binding document which dictates how their finances, assets, and even debts are divided during the course as well as after their relationship. This can be drafted and signed before, during, or after a relationship.
Those who have not been married before may have no idea what a BFA is, much more how to get one. However, this is extremely critical information especially if you want to protect your own financial interests. This article will inform you how to create a binding financial agreement for your financial peace of mind.
Can I Create My Own Binding Financial Agreement?
While there may be some DIY kits out there that will let you create a BFA, these are unfortunately not legally binding. There are certain rules and policies that must be in place for a binding financial agreement to be honored in court.
First and foremost, it has to be reviewed by at least two lawyers, and they must attest that they have provided you with legal advice regarding the document. Both parties must also sign that they have received said advice.
There are also a lot of terms and clauses that would need to be included in your BFA. These technicalities may be a little bit over your head, and you might need a professional to help you with this document in order to make it complete and, more importantly, acceptable by the courts.
Of course, you might save some money in legal fees by doing some prep work before going to the lawyer. By listing down your assets and instructions, your lawyer would definitely have an easier time drafting your document. This will help in minimizing expenses as well as in keeping all information organized and readily available.
How to Complete a BFA
Creating a binding financial agreement can be a tiring process, but it will be very well worth it in the end. It is also quite simple for as long as the situation of your relationship is not that complicated.
In some cases, having children prior to getting married, owning a business, or having a larger amount of assets than your partner can be sensitive topics, but are not something that can’t be resolved.
Find a Lawyer
Find a family lawyer that will represent you. He must be well-versed and highly experienced in drafting and reviewing binding financial agreements. You can seek assistance from a law firm or ask for referrals from friends or colleagues who have gone through a divorce or separation.
When choosing a lawyer, don’t be afraid to ask questions such as credentials, rates, and even win rates. If you talk to a lawyer and it just doesn’t feel right, then most of the time trust your guts and look for representation elsewhere.
Remember that your financial future is possibly at stake, so remember to choose a lawyer that you can trust, and who you think can provide you with the best deal and legal advice.
Provide Your Instructions
Before you start in drafting your BFA, you would most likely be interviewed or asked to fill out a form. Questions would include things such as:
- Relationship background
- Personal background of you and your wife
- Current employment
- Full disclosure on joint or individual assets, properties, earnings, and liabilities
It is during this point that you will also need to inform your lawyer of what you want to get out of the BFA. This would include no-negotiation items as well as things that you would be willing to give up or share. At this stage, detailed information is not required but it would be helpful that your lawyer knows the entire situation.
In some cases, the lawyer can advise whether signing a BFA is right for you. In some cases, this document would no longer be needed and, in fact, you may even end up on the losing end of the agreement depending on the circumstances.
If the lawyer thinks that you definitely should create a binding financial agreement, however, then you can proceed to the next step.
Discuss with Your Partner
Negotiation is probably the most stressful part of creating a binding financial agreement. Take note that this phase involves a lot of deliberation and may require several meetings. You should also remember that the other party may also want to get something out of the agreement, so try to be fair and just.
It is at this stage that clauses would be included in the contract. Try and be firm about figures and assets that you want, but also learn to give some leeway in order to gain an edge in other areas. Once all terms have been discussed, then your lawyer will start drafting the document.
It is critical that all terms and conditions that you want would be included in the document. Making amendments to the contract can be a tedious process, so the document that would need to be created should have everything that you have specified before it is signed off.
Review, Finalize, and Sign
The finished draft may go back and forth between parties for re-negotiations and amendments. Once finalized, both parties must sign the document. Lawyers are also required to discuss the advantages and disadvantages of the agreement to you and must need to sign a certificate that they have done so.
The finalized binding financial agreement must also adhere to the guidelines set in the Family Law Act of Australia. Once the BFA has been signed, then it can be filed and you can keep copies of it for your personal records.