HOW DO I PROTECT MY ASSETS FROM MY PARTNER? DO I NEED A “BFA” (BINDING FINANCIAL AGREEMENT)?

HOW DO I PROTECT MY ASSETS FROM MY PARTNER? DO I NEED A “BFA” (BINDING FINANCIAL AGREEMENT)?

Binding Financial Agreements (“BFA’s”), commonly referred to as “pre-nuptial agreements” or “pre-nups” are becoming increasingly popular globally as couples look to put in place safeguards and individual asset protection strategies to protect their financial position as they enter into a new relationship.

BFA’s are no longer reserved solely for celebrities and multi-millionaires looking to protect their wealth. They are a useful tool for people of all ages and wealth levels who are looking to provide themselves with greater financial security.  At Affinity Lawyers, we are seeing couples from all walks of life entering into BFA’s.

Suggesting a BFA to your new partner can be a daunting prospect, however there are some strategies you can adopt to make the process a little less uncomfortable:

  1. Carefully consider where and when to raise the issue – your partner may be more receptive to the idea if the relationship is going well and there are no pressing issues or arguments between you. Ideally, have the discussion when you and your partner are in a comfortable environment without others around.
  2. Explain why you are suggesting a BFA – being as transparent and honest as possible with your partner may increase the chance of a positive outcome. It may be helpful to explain that you are making the suggestion to provide peace of mind and financial security. At the same time, you could provide your partner reassurance about the state of your relationship.
  3. Consider your partner’s views – listen to your partner’s response and take it into consideration. Initially you and your partner may not be on the same page in terms of what the BFA should stipulate, however if you open up an honest dialogue with them, you may be able to agree on those terms.

Once you have agreed to proceed with obtaining a BFA, you and your partner will each need to contact different solicitors to assist you with drafting the BFA and ensuring you both receive the necessary independent legal advice. This is a fundamental requirement of a BFA and cannot be avoided.

At Affinity Lawyers, we understand the importance of providing you with sound legal advice and carefully drafting and considering each provision within a BFA. A poorly drafted BFA and deficient legal advice can present a range of risks to one or both parties to the agreement. This should be avoided at all costs.

In the recent decision of Corelli & Beroni [2019] FamCA 911, the Court considered a BFA entered into by an 87 year old man (“husband”) and his 52 year old de facto partner (“wife”). The wife was born overseas and moved to Australia in 2009 on a student visa. The husband was also born overseas but had lived and worked in Australia since 1952. During their relationship, which commenced by May 2010, the parties communicated in English and another language.

They signed the BFA in March 2011. The wife was granted a spouse visa in July 2011. The BFA and advice provided to the wife was in English. In the Court proceedings, the wife argued that she did not understand the nature of what she signed, the content of the agreement or the advice provided to her.

Both the husband and wife called evidence from hairdressers as to the wife’s conversations at her regular salon in relation to her capacity to converse in English at or about the time the agreement was signed. The husband denied that the wife could not speak English. He also said that the wife had the opportunity to obtain a translator but failed to do so, his case being that the wife had wanted the agreement signed to obtain permanent residence in Australia. The Court ultimately accepted the evidence of the hairdresser called by the wife, which suggested that there were strong restrictions on their capacity to communicate with each other.

The Court found that even on the husband’s own evidence, as at May 2010 the parties’ capacity to communicate was limited, and their conversations were a mix of Country K and English, neither of which were the wife’s first language.

The Court determined that the wife was not proficient in English on the day that she signed the BFA, or at any time prior to then.

The Court accepted that the wife was at a special disadvantage in dealing with the husband because:

  • She could not speak, read or understand English well, and was dependent upon the husband to assist her to do so:
  • She had no understanding of the law of property division upon the breakdown of a de facto relationship, whereas the husband did;
  • She could not read the BFA, whereas the husband could;
  • She was dependent upon the husband not informing immigration authorities of her breach of her guardian visa terms;
  • She was dependent upon the husband for her financial security in Australia …
  • She was dependent upon the husband for her accommodation;
  • She likely did not know that the BFA was manifestly unfair until she was told that by her lawyer on 31 March, by which time she had already determined to sign it;
  • The only way that the wife could acquire permanent residence in Australia was by remaining in a relationship with the husband and obtaining a permanent visa, however the wife knew that if she did not sign the BFA, the relationship would not continue, at least past three years; and
  • The wife was fearful of returning to Country G because of her ex-husband, which the husband was aware of.

The Court accepted the wife’s allegation that the husband was generally controlling of her, and that she was somewhat fearful of him.

It was found that the husband must have known that the terms of the BFA were simply outrageous and that his insistence that the wife sign the BFA without any amendments given her circumstances was a form of exploitation of the wife, legally and morally.

The Court found that the wife did not sign the BFA of her own free will and it was set aside.

The decision highlights the importance of both parties obtaining sound legal advice in relation to a BFA. Affinity Lawyers have extensive experience in this area of law and offer free initial consultations to help you begin the process. We invite you to contact our Gold Coast office today on 5563 8970 to arrange a consultation.

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Our office remains open, and we are following relevant guidelines to ensure the health and safety of our clients and staff.