Do I need a Binding Financial Agreement?

[BlueViper21]

Hi all,

I own a home worth approximately $450k and have a mortgage of around $250k. With my other assets, my net worth is approximately $240k. My partner's net worth approximately $25k.

We have been dating for about a year and they want to move in. Is it in my best interests to get a BFA? Or will a written rental agreement suffice? I doubt there would be any trouble if we broke up but obviously I don't want to leave anything to chance.

Thanks in advance.

 

[Atticus]

You need to be living together in a domestic relationship (de facto) for 2 years before a property settlement can be filed... That changes if you marry within that time, or if a child is born...

Basically not worth you worrying with a BFA at this point .... What is a good idea if you are moving in together though is to get together documents that are a 'snap shot' of your current financial circumstances. Things like a current property valuation, what you have in savings, investments, supper etc.

 

[sammy01]

Have a read

Home | Federal Circuit and Family Court of Australia

The Federal Circuit and Family Court of Australia focuses on innovation and fair and efficient processes that centre on risk, responsiveness and resolution

www.familycourt.gov.au

At this point the important point from the link is

• looking at the direct financial contributions by each party to the marriage or de facto relationship such as wage and salary earnings

Story time. I was married for 7 years. The ex brought in $100 000 cash. I had about the same in super at the time we got married. 7 years on and 3 kids. She kept her $ and got $15K of my super. She was the primary carer of 3 kids and minimal work opportunities due to parenting. I was working full time. Nice. Fair.... Now that was a high conflict divorce. Initially she wanted 105% of assets. Yep, no typo. 105...

So second time round. My new partner has more assets than me. We decided against a BFA because they are never water tight. So the word 'binding' in common sense land means non-negotiable. But in Lawyer land - NOPE... So even with a BFA you could find yourself spending more $ on solicitors if your partner wanted to challenge it and the longer the relationship the less water tight a BFA becomes. After 20 years your BFA is as water tight as the titanic (after it hit the ice cube)

So in 2 years time when you're officially in a de facto you should think about it then.
Condoms... Much cheaper and more water tight. Once a child is born your BFA sinks.
Your written agreement without both parties getting independent legal advice is a brick... As in it will not pass the 'water tight' test.

Love is in the air... Great. Enjoy. Realise that the family law system is pretty good. IT is selfish stupid people who choose to spend $100 000 on solicitors to try and get $10 000 that is are good.

 

[BlueViper21]

Thanks for the replies. Greatly appreciated. Is it two years of living together that makes a couple considered de facto or just 2 years together total and also living together? Eg. We've been together for 1 year living separately. If we live together for the next year, are we considered de facto?

 

[Atticus]

Is it two years of living together that makes a couple considered de facto or just 2 years together total and also living together?

As in all things family law related, there are exceptions, but 2 years living together in a genuine domestic relationship is the general principle... The exceptions are if the relationship was very long term, & one has been providing significant financial support even if not living together .... Some mistress cases come to mind, where a married man has had a mistress for years.

 

[Rod]

I'd be looking at one now. And it should refer to you living together.