Preparing a Binding Financial Agreement (BFA) requires careful planning and thorough documentation. Whether you are entering into a relationship, getting married, or separating from a partner, having all the necessary information ready will help streamline the process and ensure your agreement is comprehensive and legally sound. This article provides a complete checklist of the assets and information you will need to gather before meeting with your lawyer to create a BFA in Australia.
Personal Identification and Relationship Details
Proof of Identity Documents
Before your BFA can be drafted, you will need to provide proof of identity for both parties. This includes current passports, driver’s licences, or other government-issued identification. These documents verify the identities of the individuals entering into the agreement and are essential for the legal process. You should also have certified copies available, as your lawyer may need to retain these for their records and to satisfy their professional obligations regarding client identification.
Birth certificates are also useful, particularly if you have changed your name at any point. If either party was previously married, you will need to provide divorce certificates or documentation showing the dissolution of any prior marriages. This information establishes your legal capacity to enter into the agreement and ensures there are no complications arising from previous relationships that could affect the validity of your BFA.
Relationship Timeline and Status
Your lawyer will need to understand the nature and history of your relationship. This includes when you commenced your de facto relationship or when you intend to marry, as well as any periods of separation and reconciliation. Documenting this timeline helps establish the context for the agreement and can be particularly important if the BFA is being prepared after a relationship has already begun. For those preparing a pre-nuptial agreement, your wedding date or intended wedding date should also be provided.
You should also be prepared to discuss whether you have any children together or from previous relationships, as this can impact how certain provisions are structured. While a BFA deals primarily with property and financial matters rather than children’s arrangements, the existence of children may influence decisions about asset protection and future financial planning.
Real Property and Land Holdings
Residential Properties
One of the most significant assets to document is real property. For your family home or any residential investment properties, you will need to gather the full street address, the registered owners’ names as they appear on the title, and the current estimated market value. Obtaining a recent property valuation from a licensed valuer is recommended, though in some cases a comparative market analysis from a real estate agent may suffice for preliminary discussions. You should also have copies of the Certificate of Title for each property, which can be obtained through your state or territory’s land titles office.
Details about any mortgages or loans secured against the property are equally important. This includes the lender’s name, the current loan balance, and the names of the borrowers on the loan. You should also note whether the loan is interest-only or principal and interest, as well as any redraw facilities that have been used or are available. If the property was purchased before the relationship, documentation showing the purchase date and original purchase price helps establish the asset as pre-relationship property.
Investment Properties and Commercial Real Estate
For investment properties, you will need the same documentation as for residential properties, along with additional information about rental income. This includes current lease agreements, the weekly or monthly rental amount, and details of any property management arrangements. Documentation of expenses such as council rates, water rates, strata levies, and insurance premiums should also be compiled, as these affect the net value and income generated by the property.
Commercial properties or land holdings require similar documentation, with particular attention to any development applications, zoning restrictions, or encumbrances that may affect the property’s value or future use. If you hold property jointly with parties outside your relationship, such as family members or business partners, details of these arrangements and any shareholders’ agreements or partnership deeds should also be included.
Financial Assets and Bank Accounts
Bank Accounts and Term Deposits
A complete picture of your financial position requires disclosure of all bank accounts. This includes everyday transaction accounts, savings accounts, term deposits, and offset accounts linked to mortgages. For each account, you will need the financial institution’s name, the account number, the account holders’ names, and the current balance. It is advisable to obtain recent bank statements, typically covering the last three to six months, to demonstrate the account history and any regular deposits or withdrawals.
Joint accounts require particular attention, as you will need to determine how these will be treated under the BFA. Your lawyer will need to understand how contributions to joint accounts have been made and how the funds are typically used. This information helps in drafting clauses that fairly reflect each party’s contributions and intentions regarding shared finances.
Shares, Managed Funds, and Investment Portfolios
Investment portfolios represent another category of financial assets requiring detailed documentation. For directly held shares, you should list each company in which you hold shares, the number of shares held, the current market value, and the original purchase price. Recent holding statements from your share registry or broker will provide this information. If you use an online trading platform, downloading a complete portfolio summary is an efficient way to compile this data.
Managed funds, exchange-traded funds (ETFs), and other pooled investment vehicles should be documented similarly. Include the fund name, the number of units held, the current unit price and total value, and details of any distributions received. For those with self-managed investment portfolios, a summary of the investment strategy and any planned changes can also be useful context for your lawyer when drafting the agreement.
Superannuation and Retirement Savings
Current Superannuation Balances
Superannuation is often one of the largest assets an individual holds, making it essential to include in your BFA documentation. For each superannuation account, you will need the fund name, your member number, and the current balance. Most superannuation funds provide annual statements and online access where you can obtain this information. You should request a recent statement or download a summary from your fund’s member portal to ensure the figures are current.
If you have multiple superannuation accounts from different employers over the years, you should consolidate this information and consider whether consolidating the accounts themselves might be appropriate. The Australian Taxation Office’s online services can help you locate any lost or forgotten superannuation accounts, ensuring nothing is missed in your disclosure.
Self-Managed Super Funds
Self-managed super funds (SMSFs) require more detailed documentation due to their complexity. You will need the fund’s trust deed, the most recent financial statements and tax returns, and a list of all assets held within the fund. This may include property, shares, cash holdings, and collectibles or other permitted investments. The roles of trustees and members should be clearly documented, along with any binding death benefit nominations in place.
Because SMSFs are subject to specific regulations regarding contributions and withdrawals, your lawyer will need to understand how the fund operates to ensure the BFA provisions comply with superannuation law. If the SMSF holds property with an associated loan, the limited recourse borrowing arrangement documentation should also be included.
Business Interests and Company Structures
Sole Trader and Partnership Interests
If you operate a business as a sole trader or in a partnership, comprehensive business documentation is required. This includes your Australian Business Number (ABN) registration, business name registration, and any relevant industry licences or registrations. Financial records including profit and loss statements, balance sheets, and business tax returns for the past two to three years provide insight into the business’s value and performance.
For partnerships, you should provide a copy of the partnership agreement detailing each partner’s share of profits and capital, their rights and obligations, and any provisions for the dissolution of the partnership. Understanding the structure of your business interests helps ensure the BFA accurately reflects your ownership and protects these assets appropriately.
Company Shareholdings and Directorships
If you hold shares in private companies or act as a company director, additional documentation is necessary. Company details from the Australian Securities and Investments Commission (ASIC) register, including the certificate of registration and current company extract, should be obtained. Shareholders’ agreements, company constitutions, and minutes of any relevant meetings may also be required, particularly if these documents contain provisions affecting share transfers or valuations.
The value of company shareholdings can be complex to determine, especially for private companies. Recent company financial statements, accountant-prepared valuations, or an explanation of how the business might be valued will assist your lawyer in drafting appropriate provisions. If you are a director but not a shareholder, details of any director’s fees, loans to or from the company, and other financial entitlements should also be disclosed.
Trust Interests
Interests in trusts, whether as a beneficiary, appointor, or trustee, require careful documentation. The trust deed is the primary document needed, along with recent trust financial statements and tax returns. You should identify the type of trust (such as discretionary or family trust, unit trust, or hybrid trust) and clarify your role and entitlements under the trust structure.
For discretionary trusts, the relationship between your role and your potential benefit from trust distributions is relevant. While beneficiaries of discretionary trusts do not have a fixed entitlement to trust assets, these interests may still be considered as a financial resource. Your lawyer will advise on how to appropriately address trust interests within your BFA.
Vehicles, Boats, and Other Registered Assets
Motor Vehicles
All motor vehicles owned by either party should be listed, including cars, motorcycles, caravans, and trailers. For each vehicle, provide the make, model, year of manufacture, registration number, and registered owner’s name. The current estimated value can be determined using online valuation tools or by obtaining a quote from a dealer. If any vehicle is subject to finance, the lender’s details and current payout figure should also be included.
Classic cars, modified vehicles, or prestige vehicles may require a formal valuation from a qualified valuer to accurately reflect their market value. If a vehicle is used for business purposes or is owned by a company or trust, this should be noted as it may affect how the asset is treated in the agreement.
Boats, Caravans, and Recreational Vehicles
Similar documentation is required for boats, jet skis, caravans, camper trailers, and recreational vehicles. Registration details, purchase receipts, and current market valuations should be compiled. For boats, details of any marina berths or moorings, whether owned or leased, should also be included as these can represent significant value.
If these assets are primarily used by one party or were acquired before the relationship, noting this context can assist in drafting provisions that reflect the parties’ intentions regarding ownership and division.
Personal Property and Valuables
Jewellery, Artwork, and Collectibles
High-value personal property items warrant individual documentation. Jewellery, artwork, antiques, collectibles, and other valuable items should be listed with descriptions, photographs where possible, and estimated or appraised values. Insurance valuations or recent appraisals from qualified valuers provide the most reliable evidence of value. If items were inherited or received as gifts, documentation of their provenance can help establish them as separate property.
Collections of items such as stamps, coins, wine, or memorabilia may also hold significant value and should be disclosed. Where items have both monetary and sentimental value, recording each party’s wishes regarding these items can help prevent disputes and ensure the BFA reflects your intentions.
Household Contents and General Personal Effects
While individual items of household furniture and contents may have modest value, collectively they can represent a substantial asset. Preparing an inventory of significant household items, along with their approximate values and ownership, is useful. This might include furniture, appliances, electronics, and tools. Insurance schedules listing contents and their values can provide a helpful starting point for this inventory.
It is also worth noting items of particular sentimental significance that you wish to specifically address in the agreement, even if their monetary value is low. This ensures clarity and can help avoid disagreements about items that may not have obvious financial worth but hold personal importance.
Liabilities and Debts
Mortgages and Secured Loans
A complete financial picture requires disclosure of all liabilities, not just assets. For each mortgage or secured loan, provide the lender’s name, the security property, the current balance owing, the regular repayment amount, and whether the loan is held jointly or individually. Recent loan statements will contain most of this information. If you have access to redraw facilities or offset accounts, the available balances should be noted.
Any personal guarantees you have provided for loans to others, such as guaranteeing a family member’s loan or a company’s borrowings, should also be disclosed. These contingent liabilities may become actual debts if the primary borrower defaults, and your lawyer needs to be aware of these potential obligations.
Unsecured Debts and Credit Cards
Credit cards, personal loans, student loans, and other unsecured debts should be listed with the creditor’s name, account number, current balance, and repayment terms. For credit cards, both the current balance and the credit limit should be noted. If debts are held jointly with your partner or individually, this distinction is important for determining how they will be treated in the agreement.
Any debts owed to family members or informal loans should also be documented, even if there is no formal loan agreement. These obligations can affect your overall financial position and may be relevant to the agreement’s provisions regarding liabilities.
Income and Financial Resources
Employment Income and Benefits
Your current income and employment arrangements are relevant context for the BFA. Provide recent payslips, your employment contract, and details of any additional benefits such as bonuses, commissions, share options, or employer-provided vehicles or housing. Your most recent tax return and notice of assessment give a comprehensive overview of your annual income from all sources.
If your income is variable due to commission, overtime, or irregular work patterns, providing information about your typical earnings over the past two to three years gives a more accurate picture. Any anticipated changes to your employment or income, such as planned career changes, parental leave, or retirement, should also be mentioned.
Other Income Sources
Income from sources other than employment should be documented. This includes rental income from investment properties, dividends from shares, distributions from trusts, interest from savings, and any government benefits received. For those receiving family support payments such as child support from a previous relationship, these should also be disclosed as part of your overall financial resources.
Future entitlements, such as expected inheritances or interests under a deceased estate that is still being administered, may also be relevant depending on the nature of your agreement and how you wish to treat future windfalls.
Insurance Policies and Future Entitlements
Life Insurance and Income Protection
Insurance policies with a cash value or surrender value should be documented. This primarily applies to whole of life or investment-linked life insurance policies, rather than term life insurance which typically has no cash value. Provide the policy schedule, the current surrender value if applicable, the sum insured, and the beneficiary nominations.
Income protection, total and permanent disability (TPD), and trauma insurance policies held outside superannuation should also be listed. While these may not have a current cash value, they represent financial resources that could be relevant in certain circumstances.
Expected Inheritances and Other Future Assets
While not yet received, expected inheritances or interests under family trusts or estates can be relevant to a BFA, depending on how you wish to structure your agreement. If you anticipate receiving an inheritance or are named as a beneficiary under a will or trust, disclosing this allows your lawyer to draft provisions addressing how such assets will be treated if received during your relationship or in the event of separation.
Other future entitlements, such as pending insurance claims, legal settlements, or deferred compensation from employment, should similarly be disclosed. This ensures your BFA comprehensively addresses your complete financial circumstances.
Preparing Your Documentation
Organising Your Records
Compiling all the documentation described above may seem daunting, but organising your records systematically makes the process more manageable. Creating separate folders for each category of assets and liabilities, whether physical or digital, helps ensure nothing is overlooked. Using a spreadsheet to summarise your assets and liabilities with their values provides a useful overview that can be shared with your lawyer.
Both parties to the BFA should prepare their own documentation independently to ensure full disclosure. This is not only a practical requirement but also a legal one, as each party must provide frank and honest disclosure of their financial circumstances for the agreement to be valid and enforceable.
Obtaining Valuations and Statements
For assets requiring valuation, such as real property, businesses, or valuable personal items, obtaining professional valuations before your initial consultation can streamline the process. While not always required at the first meeting, having valuations ready allows your lawyer to draft the agreement more efficiently and reduces delays.
Current statements for bank accounts, superannuation, loans, and investments should be no more than three months old to ensure they accurately reflect your current position. If significant changes have occurred since the statement date, note these for your lawyer’s attention.
Get Assistance With Your Binding Financial Agreement
Having a complete checklist of assets and information prepared before you meet with your lawyer saves time, reduces costs, and helps ensure your Binding Financial Agreement is comprehensive and tailored to your circumstances. Thorough preparation and full disclosure are essential for creating an agreement that protects both parties and stands up to scrutiny if ever challenged.
As a binding financial agreement law firm, my law firm can help you through every step of the BFA process, from initial advice to final execution. We offer transparent, fixed fee pricing so you know exactly what to expect. Contact our team today by calling 1300 529 888 to discuss your circumstances and begin preparing your agreement.