If you are considering moving in with or marrying your partner, or even if you have been together for a period, it may be wise to think about protecting your assets in the event of a separation.

This may be particularly important where:

• You have acquired assets prior to the relationship that you wish to keep, possibly for children of a prior relationship;
• You have an interest in a business, family trust or company;
• You expect to receive a substantial inheritance in the future; or
• You have received a large sum of money as a gift, for example from your parents for a house deposit.

You can protect these interests by entering into a binding financial agreement (BFA) with your partner. A BFA can prevent uncertainty and litigation by specifying how property will be divided.

It is not too late if you have already moved in together or are married. A BFA may be entered into before, during or even after a marriage or relationship has ended. Note that a BFA entered into whilst in a de facto relationship ends automatically upon marriage.

For a BFA to be enforceable it must comply with strict requirements in the Family Law Act. Each party must receive their own independent legal advice and enter the BFA of their own free will. Also, each party must fully disclose all assets and liabilities including property, savings, shares, insurance policies and superannuation.

If you think a BFA might suit your circumstances, discuss this with your partner and seek legal advice. It may not be a pleasant issue to raise but, like an insurance policy, a BFA may save both of you a lot of cost and heartache in the future.

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