A binding financial agreement is an agreement between two parties that are in a relationship and while a pre-nuptial agreement is drawn up at the start of a relationship (married or de facto), a binding financial agreement can be drawn up at any stage of the relationship.
Why Have a Binding Financial Agreement in Place?
There are numerous reasons to enter into a binding financial agreement, which are as follows:
- If you have children from a previous relationship and you wish to have some form of financial security in place for them.
- When one party has considerable wealth and would like to protect that wealth.
- You might own a successful business and wish to protect it.
- In the event you are soon to come into an inheritance, a binding financial agreement will protect this wealth.
In the event you do not have a binding financial agreement in place when the relationship ends, then the Family Court would apply the provisions of the Family Law Act when determining matters. If you make contact with a local firm that practices family law in Adelaide, then you can draw up the agreement and when this is approved by the Family Court, it becomes a legally binding agreement that cannot be changed by either party.
Prerequisites for a Binding Financial Agreement
In order to put a binding financial agreement in place, both parties must receive financial advice, with the relevant lawyers involved also having to sign the agreement, to testify that both parties have, in fact, had legal counsel regarding the contents of the agreement. The law states that for both parties to enter into such an agreement, they must both fully understand the consequences, which is why the respective lawyers must testify that they have counselled their client and that they fully understand the terms and conditions of the agreement.
Free Initial Consultation
If you are thinking of drawing up a binding financial agreement, the family lawyer would likely offer you a free 30-minute consultation (by video call), during which time the lawyer would offer you advice. Of course, every relationship is unique and the family lawyer would advise you accordingly, and if they feel that another option would be a better solution, then the lawyer would recommend this.
The first step would be to introduce the topic to your partner and should they be in agreement, then you can ask a family lawyer to help you create the document that outlines the distribution of your wealth in the event the relationship comes to an end.