Almost everyone wants to get married at one point or another. At the very least, living with someone and creating a family of your own is a dream that most of us have had. After all, don’t they say that love is what makes the world go around?
Unfortunately, the reality is that not all relationships have a fairy tale ending. Due to one reason or another, relationships do end, and picking up the pieces during and after a separation can be a very difficult process, both emotionally and financially.
With that, you should never marry or enter a de facto relationship without a binding financial agreement. There are many reasons on why this is so, and here are just some of them. Hopefully, this would encourage you to get a BFA now if you are planning to get married or live together, and even if you are already at that stage in your life.
Divorce Rates in Australia
While divorce rates in Australia are relatively low compared to some countries, a one out of three ratio is still a bit disconcerting. Even if you have been married for a long time, you are still not safe from the risk of divorce as data shows that the average length of marriages of couples that end in divorce is getting longer.
For this reason, many Australians are doing co-habitation instead. Still, as finances as being shared during this time, having a binding financial agreement may also be a good idea. Australian law even allows same sex couples to create this type of contract and it would be honored by the courts.
You Need to Protect Your Assets
Assets, financially speaking, may include but are not limited to the items below:
- Cash
- Houses
- Cars
- Investments
- Company Shares and Stocks
- Jewelry
- Precious Memorabilia
A binding financial agreement will allow you to protect certain assets, if said terms are agreed upon by your partner beforehand. This is especially important for those who have certain properties that they would like to keep for their own for their children outside of the marriage or partnership.
Special memorabilia like valuables handled down from generations or control over a family owned business are things that you would most likely want to keep after the relationship has ended. In some cases, you may even want to lay claim over ownership or custody of pets that you may have.
By drawing up a binding financial agreement beforehand, there would be no more need to argue about these matters and these assets are as good as yours.
You Want to Eliminate Further Stress
Any type of separation can be very stressful, and arguing over who will own what can lead to a lot of tense moments, especially if the divorce or dissolution of the relationship was on bad terms. You can have a less stress free separation process as there would be no more need to discuss about ownership of assets with a BFA in place.
A binding financial agreement, like a will, is a document that will be executed once the relationship has been dissolved. A BFA is legally binding and will be honored by any court. While BFAs can be invalidated or set aside in some cases, the chances of these are slim.
As such, having a binding financial agreement will definitely lessen your burden as it will eliminate a lot of work that is typically included in divorces. There would be no more need to talk to your spouse about these matters as everything has already been settled and can be immediately put into motion.
You Will Have Less Arguments
Not only does a binding financial agreement help you settle your accounts and divide assets with your spouse should you decide to separate, but it can also define financial matters while you are still in a relationship. This can be really helpful as it helps define the ground rules that are actually enforceable by law.
Binding financial agreements can help determine your financial responsibilities both as individuals and as a couple. This would include ownership of any earnings or properties that you may acquire during the course of your relation. This can also include spending responsibilities, as well as liabilities and debt.
Including these terms in a BFA before you get married can help you have more control over your assets and finances, especially if you are the breadwinner in the family. As early in your relationship as possible, you can set these controls at terms that both parties will be amenable to.
Your Future Would Be Better After Separation
If you are expecting a big inheritance in the future, or if you are in the line of succession in your family business, then clauses involving these should definitely be included in a binding financial agreement before you marry.
You can protect these assets by declaring these to be controlled by you only, and your spouse will not be able to touch these for as long as she signed the agreement. You can even put special clauses in the BFA wherein she will only be eligible to a certain portion of your assets if you do not get divorced after a certain period of time.
Other issues, such as whether you will be paying spousal support, may also be included here. This is especially important if you intend to marry again and have other children as well.
When creating a binding financial agreement, it is important to think not only of what you currently have, but what may also happen in the future. A BFA that strongly focuses on possible acquisitions and positive bumps in financial status in later years can definitely protect you, and doing this even before a marriage is an absolute must.
Conclusion
A good binding financial agreement will help protect your assets and finances during a relationship. It can also help you get back on your feet faster after a breakup. For these reasons, having a binding financial agreement is a must especially in these times when divorce is a very common occurrence.
Get an experienced lawyer to help you draw up a BFA before you marry and this will definitely save you from a load of stress as well as a lot of financial burden in the end.