Getting married, are married or have been married?
You may wish to consider a Binding Financial Agreement. It is not pessimistic or opportunistic to consider a Binding Financial Agreement for the division of assets prior to or upon the breakdown of a relationship. It is a realistic and practical way of managing your financial affairs with your spouse and hopefully, it will never have to be put into action. Like health insurance, the Binding Financial Agreement is a preventative measure. It may provide asset protection at a time when emotions run high.
A Binding Financial Agreement is a contract between the parties setting out how the assets of their union should be divided if the relationship should cease. Assets which may be considered in Binding Financial Agreements are shares, real estate, vehicles, superannuation, valuable personal items, prospective inheritances, and other goods.
A Binding Financial Agreement may help to prevent a break up becoming “messy” if the parties disagree on how to divide assets.
Issues such as Capital Gains Tax and Stamp Duty can be considered in your Binding Financial Agreement to make it as tax-effective as possible and should be discussed with an accountant or specialist who can provide tax advice.
Binding Financial Agreements are especially useful when one partner is bringing in significantly more wealth, a family business is being transferred, the partners are an older couple and/or have children from previous relationships, one partner has a large disposable income and accumulated assets or if one partner has wealthy parents.
A Binding Financial Agreement is only legally binding when signed by both parties and each party has sought independent advice from a lawyer explaining the content and consequences of the Binding Financial Agreement. It does not require registration or approval from any Court or any other instruction.
Domestic Relationship Agreements can be made between same sex couples, de factos, and other persons in specified living arrangements to organise the division of assets upon break down of that relationship or living situation.
Binding Financial Agreements can also bring tax benefits. For example, where a property is transferred as the result of a Binding Financial Agreement then the parties can normally apply for a stamp duty exemption.
If you would like more information or would like to have an obligation free discussion to see if a Binding Financial Agreement is suitable in your circumstances, feel free to contact our Family Law Partner Anthi Balafas or Senior Associate Cristian Fuenzalida.