Protecting your assets in a blended family

If you are starting a new relationship and have children from a previous relationship, you might be concerned about protecting your assets. I find this is particularly the case for people have already been through separation and divorce, and are wary of losing a big chunk of their assets a second time around.

If you are in this situation, there are options under both family law (in the event of separation) and succession / estate planning (in the event of death).

Your option under family law is to have a Financial Agreement – also sometimes called a Binding Financial Agreement, a BFA or Pre-Nup.

You can enter into a Financial Agreement before starting a new relationship, during the relationship or after you have separated.

A Financial Agreement can be made between de facto and married couples alike.

It is essentially a contract between you and your spouse which sets out the property that each person is to retain in the event of the breakdown of the relationship. There is no requirement for the property split as set out in a Financial Agreement to be ‘fair’.

A Financial Agreement can be used to quarantine most assets, including your home, an inheritance you have received or expect to receive, your business, or your superannuation interests, to name a few.

A Financial Agreement can be used hand in hand with estate planning, particularly if you wish to quarantine a particular asset for the benefit of your children upon your death.

In order for a Financial Agreement to be considered binding, it must comply with the Family Law Act 1975. Both parties must receive independent, specific legal advice prior to signing a Financial Agreement, and each person’s lawyer must sign a certificate that to that effect.

Justine Dean – Samford Family Law