The conversation you need to have
with Joseph Sampson , Family Law Solicitor McDonnell Schroder
New relationships are exciting , but along with the possibilities , there are pitfalls to be avoided .
Couples moving in together or getting married can rule out potential future confusion or conflict at an early stage by entering a Binding Financial Agreement ( BFA ). BFAs can be entered into at any stage before , during or after a relationship – de-facto or marriage – and can be for both opposite-sex and same-sex couples .
Having a BFA means that parties can jointly plan what will happen to their assets , liabilities and super . Because a BFA is something that can be tailormade for the couple , you can be sure
that your agreement will cater to your and your partner ’ s circumstances .
While it can seem daunting or inauspicious to broach the subject during a budding relationship , it is actually a mature and responsible step to take . Nobody plans for the worst to happen , but we have tough conversations about uncomfortable possibilities all the time .
Healthy people make wills in case the worst happens . We take out insurance in case of a disaster . When we play sport , rent cars or even just update the operating system on our phones , we consider risks , weigh probabilities and come to terms .
Making a BFA is just about protecting you and your partner against a future neither of you plan or expect to happen – but you both still want to be safe and certain if it actually does .
A BFA is a legal document and there are strict requirements for validity that must be met . But many couples have found that the certainty and peace of mind are more than worth it . If you don ’ t want to leave things to chance , it is well worth your while to talk to your solicitor about such an agreement .
If you need legal advice from a professional , contact McDonnell Schroder on 9622 1155 .
This article is written in a general non-specific manner . Always contact your solicitor for specific legal advice .
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• Children ’ s Matters and Parenting Disputes
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The new STD of today - joint debt
with Katherine Hawes Principal Solicitor Digital Age Lawyers
Moving in with someone is a big step . Starting a life with a partner can be amazing , and it is easy to get swept up in colour palettes and love bubbles . But at this time , when everything is an ‘ us ’, is the most important time to think about ‘ you .’ Entering into joint bank accounts or going in 50 / 50 in a loan might seem like the most practical way to manage your finances , but these systems can unintentionally lead to bigger problems in the long run .
WHAT IS SEXUALLY TRANSMITTED DEBT ? No one wants to imagine that a good thing might end , but when there are assets involved , it is better to be safe than sorry . Sorry is behind the new financial societal phenomenon – sexually transmitted debt – it is on the rise . Sexually transmitted debt can manifest in a number of ways : When one party accepts a debt or liability that they would not have otherwise accepted if not for the emotional connection in the relationship with the other party . If one party to the relationship is not fully aware of the debts of the other party , they may be left liable to pay the debt due to the nature of the financial ties between the parties If one party stops meeting their commitment to shared debts leaving the other party to satisfy financial obligations .
HOW IT STARTS The way that debt can transfer from one side to another is not always the same across the board but there are a few common denominators :
Whether you and your partner are in a de facto relationship . Many people fall into a de facto relationship and don ’ t necessarily realise the full extent or liability behind this concept . The Family Law Act S 4AA outlines factors that the court uses to define whether a de facto relationship exists . Amongst other things , the duration of the relationship , the amount of financial interdependence , the care of children and the degree of mutual commitment to a shared life are all relevant considerations to finding a de facto relationship . De facto relationships include same sex relationships and can operate to have the same effect legally as a marriage .
What assets and / or debts you came into the relationship with . When one party has more assets than the other or they earn more than the other person , is usually when things start to get tricky . You could find yourself contributing more , paying more towards bills and expenses and even covering your partners shortfalls and debts . Whether you plan for this to happen or not , should the relationship break down you may be liable to continue to support the person financially .
HOW TO PROTECT YOURSELF – BINDING FINANCIAL AGREEMENTS
Ex-de facto couples in this situation are common fixtures throughout the Family Law Courts , where the matter has escalated to the point that a judge has to untangle the assets and liabilities of both parties for a fair and equitable outcome . However , there is a more effective way to protect yourself from incurring your partner ’ s liabilities .
BINDING FINANCIAL AGREEMENT A Binding Financial Agreement , commonly referred to as a ‘ pre-nup ’ is a legally binding document that allows you and your partner to decide how to divide your property and financial resources if there is a breakdown in your relationship .
Here are the fun facts :
• Can be drafted before , during or after a relationship .
• Deals with issues of spousal maintenance .
• Can be used to protect your business , investments and property .
• Financially protects children , either from the present or earlier relationship .
• Peace of mind that your and your partner ’ s interests are protected .
Many people believe they can prepare this document . Our suggestion is to engage an experienced lawyer or at a minimum have a lawyer review your documentation and seek independent legal advice for one of the parties .
To learn more about Binding Financial Agreements or to discuss your circumstances , please do not hesitate to contact our Family Law team on ( 02 ) 8858 3211 .
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THE HAWKESBURY INDEPENDENT theindependentmagazine . com . au ISSUE 137 // OCTOBER 2021 17