People often want to know the ways to protect their existing assets before entering into a relationship or before getting married. It is advisable to discuss this with your partner before you get married.
Binding Financial Agreement also commonly known as prenup is a good starting point, but it is not the only way to secure your assets in an event of separation from your partner.
- Binding Financial Agreements (BFA) allow parties to divide their property as intended, without the court interference.
- BFAs may be entered into by de-facto partners or married couples at any time that is before, during or after a marriage or de facto relationship. However, there are some very strict rules that must be met and this is not an absolute.
CAN BFA OR PRENUP BE SET ASIDE?
- BFAs can be set aside if they were vitiated by fraud, duress or undue influence or when a court simply declines to enforce them.
- The court may also decline to enforce a BFA, which creates uncertainty about its validity for practical purposes.
- In essence a BFA must be a valid contract.
- The BFA can be voidable under s 90G(1)(b) of the Act for undue influence and unconscionable conduct.
It is always a good idea to keep your assets and liabilities separate where possible. It may be hard to bring a property settlement claim where parties can show that they have kept their assets entirely separate and have made no financial or non-financial contributions to each other’s assets during that relationship.
WHAT ARE SOME WAYS TO PROVE THAT YOU KEPT YOUR FINANCES SEPARATE?
- Keep separate bank accounts;
- Open new joint accounts during marriage and DON’T mix with what you brought into relationship.
- Keep your property in your name and make sure you are solely responsible for all their repayments, rates and other outgoings.
- Keep all motor vehicles or other assets under your name.
- Avoid owning assets in joint names.
- Try not to add your partner as a secondary card holder for your credit cards.
- Prepare a will.
- You may want to consider creating a Family Trust and not including your partner as a beneficiary.
- Make sure your Superannuation beneficiary is updated and does not include your new partner.
Please note that this article is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and DO NOT rely on this article as legal advice. We can advise on your Family Law issues. Simply call 02 9891 2636 to book an appointment with our Family Law Lawyer.