As it is not a particularly romantic idea, it may not have occurred to you to contact a lawyer when entering into a long-term relationship. However, it should be one of the first steps you take when deciding to share your life (and by extension, your assets) with someone.
Here’s a secret Disney doesn’t tell you: Most of the time, ensuring your happily-ever-after requires a Binding Financial Agreement.
No one enters into a relationship imagining that it will end one day. Everyone wants to believe his or her relationship will last forever. From the moment you meet and decide to marry your beloved, your thoughts are most likely filled with building a life together and having a hand to hold through new careers, homes, and life stages.
It is easy to get caught up in the excitement of new beginnings without giving any thought to how things may end. Unfortunately, sometimes relationships end and love requires equal amounts of practicality and sentimentality.
A Binding Financial Agreement is how you protect your assets even if you can’t protect your heart.
In Australia, a Binding Financial Agreement can be established between married or de facto couples, before, during, or after their relationship. A Binding Financial Agreement is a term that includes several different financial agreements:
- Pre-nuptial Agreements
- Post-nuptial Agreements
- Cohabitation Agreements
- Separation Agreements
- Divorce Agreements
A Binding Financial Agreement allows couples to decide how their assets will be divided in the case of separation. Without ever having to appear in court, couples can decide on the agreement that best fits them and their unique circumstances. Couples are afforded a flexibility that would not be possible in court and can avoid the uncertainty, cost and stress of a course settlement.
You don’t have to approach Binding Financial Agreements with a sense of resignation or sadness. Instead, think of your Binding Financial Agreement as a way of saying to your partner: “I love you so much that I want us to prepare for every possible outcome of our relationship. I respect you enough to want you to protect your own assets while I also protect mine.”
While it is true that establishing a Binding Financial Agreement introduces a new way of looking at your relationship, you can view the agreement as a necessary, practical, and beneficial step. Don’t let worries about your personal assets negatively affect your relationship; prepare for all outcomes with a Binding Financial Agreement.
This type of agreement is especially important if there are dependents involved. In many cases when couples separate and children are often forced to choose who they will live with. The additional strain that comes with dividing assets (which can require mediation or in the worst of cases, the involvement of the courts) just adds additional pressures and stress, which increases the toll separations take on young dependents caught in the middle. So if you needed additional motivation to seek advice from an estate lawyer on Binding Financial Agreements, you need only think of the children. Remember too, that even if you don’t currently have dependents, you may end up having them one day. Seeking advice now will take one potential future stress or out of the equation, so you can get on with planning your future worry-free.
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