Speaker 1: She's on the Money. She's on the Money.
Speaker 2: Hello, and welcome to She's on the Money, the podcast
Speaker 2: for millennials who want financial freedom, finding financial agreements? What
Speaker 2: are they who needs one? And are they actually worth it?
Speaker 2: My name is Jessica Riki and I'm not a copywriter,
Speaker 2: but you should know me by now, and I am
Speaker 2: joining as always Miss Victoria Divine.
Speaker 3: Hello is Jessic Goddici?
Speaker 4: How you going?
Speaker 3: And you want a Wednesday episode?
Speaker 2: I know, I know, I always feel like I have
Speaker 2: big shoes to fill on a Wednesday, but today it's goologized.
Speaker 3: Georgia apparently has a lot to do, and you are
Speaker 3: helping the team out to make sure this podcast gets
Speaker 3: in their ears every single Wednesday, and it is very
Speaker 3: much appreciated.
Speaker 2: We love it. She's in demand, she's a busy woman.
Speaker 2: But today you're actually not going to hear too much
Speaker 2: from me because talking about binding financial agreements, I'm not
Speaker 2: a copywriter. I'm also shockingly not a lawyer.
Speaker 3: You don't know? Sorry, so you didn't lie on your
Speaker 3: application to She's on the Money when you were trying
Speaker 3: to get employed by us?
Speaker 2: Absolutely not.
Speaker 3: I did know that, and I'm not a lawyer either. Jess.
Speaker 3: And while I talk about binding financial agreements all the
Speaker 3: time as being really important, I always say speak to
Speaker 3: a lawyer, because that's what you absolutely should do. So Jess,
Speaker 3: what are we doing today?
Speaker 4: We're gonna see to a lawyer.
Speaker 3: Oh not me, a real lawyer. So we are lucky
Speaker 3: enough that Lucy Percy from Head and Heart Estate Planning
Speaker 3: has agreed to come on the podcast today and answer
Speaker 3: all of our perfect questions. Jess. I had a really
Speaker 3: beautiful conversation with her earlier and I can't wait.
Speaker 4: For you to hear it.
Speaker 2: I'm so excited. Let's it jump straight in.
Speaker 3: We're jumping straight into this, Lucy, straight into the deep.
Speaker 3: And can you tell us what's a binding financial agreement
Speaker 3: and why do we need one?
Speaker 5: Okay, So, a binding financial agreement is, as the name suggests,
Speaker 5: an agreement, a contract between two people. It's going to
Speaker 5: operate in their lifetime. So the key thing there is
Speaker 5: it's not going to cover you after death. And we
Speaker 5: are contemplating people in a relationship and they want to
Speaker 5: set out the guidelines and have some certainty about what
Speaker 5: is going to happen to the assets that they create
Speaker 5: together and what is going to happen to the assets
Speaker 5: that they own or control or create separate from each.
Speaker 3: Other, which I think is really important. And obviously, like
Speaker 3: as a financial advisor, I talk about these all the time,
Speaker 3: but at the end of the day, you're the authority
Speaker 3: in this area. You are literally an estate plan lawyer.
Speaker 3: So putting people's things in order is your bread and
Speaker 3: butter that you work with every single day. But what
Speaker 3: kind of assets are we talking about? Are we talking
Speaker 3: about things that you've already done? Like what if I
Speaker 3: went and bought a house before I met Steve? Like,
Speaker 3: is that something we'd put in there? Is it only
Speaker 3: the stuff that we do together?
Speaker 4: No?
Speaker 5: Absolutely, So it can be things that you have accumulated
Speaker 5: before you were together, or things that you do while
Speaker 5: you're together. I think there are most of the people
Speaker 5: who I refer to get funding financial agreements are in
Speaker 5: a situation where they have brought different assets to the relationship.
Speaker 5: They're doing their estate planning, but quite often they're living
Speaker 5: in one of the properties that the other has accumulated
Speaker 5: prior to the relationship. And it's not as simple as
Speaker 5: saying you get out what you take in, because someone
Speaker 5: might have often contributed to the mortgage repayments or capital
Speaker 5: improvement and so or you know, if there's been a
Speaker 5: really great capital growth, do you want that reflected in
Speaker 5: some way. There's also tax benefits to living in the
Speaker 5: property that say you might own as opposed to your partner,
Speaker 5: and so, you know, it's a little bit tricky then
Speaker 5: saying let's just walk away with what we bought in.
Speaker 3: Yeah, and I think that that's a really important conversation
Speaker 3: to have as well. And I know in now she's
Speaker 3: on the money community, this is a bit left field, sorry, Lucy.
Speaker 3: But we've had people say, oh, I just tell my
Speaker 3: partner to transfer money that I use to pay my
Speaker 3: mortgage off just named as rent, so that they can
Speaker 3: never claim anything towards my house or if we break up,
Speaker 3: they can't say that they paid half the mortgage.
Speaker 4: Is that true? No, not at all.
Speaker 3: And I'm really smart and I was like, let's actually
Speaker 3: ask a lawyer this question.
Speaker 5: No, there is no one size fits all approach to
Speaker 5: what's going to protect your asset. And quite often it
Speaker 5: might be a BFA in conjunction with if you're owning
Speaker 5: property together, you can have property agreements, joint venture agreements.
Speaker 5: Will you need a blanket approach, and a BFA is
Speaker 5: a piece in the puzzle. Most areas of the law
Speaker 5: can cut through what you are purporting to do and
Speaker 5: they're actually going to look at the facts of what
Speaker 5: was happening. And I think the other point to make
Speaker 5: with family law, when a relationship deteriorates, it is not
Speaker 5: so much about what was yours what was mine. It's
Speaker 5: about what sort of dependency has been created.
Speaker 4: Between the two people. So even if we could put
Speaker 4: a line in the sand about.
Speaker 5: This is yours, that's mine, and there's no difficulty in
Speaker 5: you know, saying that was rent only it is about
Speaker 5: that dependency. And that's the way it is with a
Speaker 5: state law as well. So you know, you can say
Speaker 5: what you want, but the law is complex and dependency
Speaker 5: is a huge part of it, not just what was yours.
Speaker 3: Yeah, And that's exactly why we need people like you
Speaker 3: were easy, because it is different for everybody and it
Speaker 3: is one of those things where we don't actually know.
Speaker 3: And I think a good example of that is if
Speaker 3: we feele or my male took all their time off
Speaker 3: to raise kids and then they went through a divorce
Speaker 3: twenty years later, it's not actually who earned what is it.
Speaker 3: It's very much based on who put what in and
Speaker 3: who put what in and what the dependency is, right, Like,
Speaker 3: that's what you mean when you say dependency right.
Speaker 4: Correct and missed opportunities.
Speaker 5: So you know, if we had someone who was entrepreneurial
Speaker 5: or built this incredible business and the other person was
Speaker 5: the stay at home or the primary carers, so exactly
Speaker 5: the case for my husband and I right now, that
Speaker 5: needs to be reflected. So yeah, definitely it is nuanced.
Speaker 5: And so you know, to add to that, you know
Speaker 5: when you said you know, it does make lawyers important,
Speaker 5: and so I would caution people against hearing the word BFA,
Speaker 5: typing it into Google, finding a bot and filling it
Speaker 5: out because this is an area of law where you
Speaker 5: need legal advice attached to the documents.
Speaker 3: Okay, important because at the same time, I am very
Speaker 3: lucky Steve and I have a blinding financial agreement. It's
Speaker 3: no secret, and we did go through a lawyer to
Speaker 3: set it up, but it was kind of a prerequisite
Speaker 3: of me saying you want to live with me, here's
Speaker 3: the deal, and thankfully he was like, yeah, okay, no problems,
Speaker 3: Like that's about you protecting your business and she's on
Speaker 3: the money, and you protecting Zella and everything that you've
Speaker 3: worked for. But in the same way, it was about
Speaker 3: protecting his income because he has a nice job, and
Speaker 3: I would never want to turn around and you know,
Speaker 3: bite him in the bottom. I guess you could say.
Speaker 3: But that was an easy conversation, I mean not super easy,
Speaker 3: but an easy conversation for me to have because I'm
Speaker 3: a financial advisor. Talking about money, talking about wills, doing
Speaker 3: all of that kind of stuff is just second nature
Speaker 3: to me. But at what stage does everybody need that?
Speaker 3: And how do we go about that conversation?
Speaker 4: Yeah?
Speaker 5: Absolutely, I think when we're talking about binding financial agreements,
Speaker 5: there are suppose three things that I want you to
Speaker 5: think about. If you your cell phone property and you
Speaker 5: are not sure if you were in it what we
Speaker 5: used to call de facto, but it's actually domestic, unregistered
Speaker 5: domestic relationship, go and get advice. If you are expecting
Speaker 5: an inheritance, or if you've had a business take off
Speaker 5: or an asset that has really increased, then that might
Speaker 5: be a certain time to do it. When there's a
Speaker 5: change in your earnings or your asset position. And the
Speaker 5: other trigger that I want you to think about is
Speaker 5: if your parents are separated, or maybe one of your
Speaker 5: parents's widows and they're talking about entering into a new relationship,
Speaker 5: you can share this knowledge with them and say, hey,
Speaker 5: I'd feel so much more comfortable if you asked about
Speaker 5: and did abiding financial agreements. So I always try and
Speaker 5: tell people absorb the information for yourself and then keep
Speaker 5: your ears peeled for your sister, your mum, your dad,
Speaker 5: your aunt, like share.
Speaker 3: Yeah, And I think that one thing I've said on
Speaker 3: this podcast before, and I'm sure you're probably going to
Speaker 3: subscribe to this as well, Lucy, I don't mind being
Speaker 3: the bad guy. You want to bring me up and say, oh, Victoria,
Speaker 3: listen to this podcast. Victoria and Lucy were saying, we
Speaker 3: need a binding financial agreement. Blame it on us, Say
Speaker 3: we told you that you needed it to break the
Speaker 3: ice and have that conversation with your partner, because it
Speaker 3: is really hard if you're sitting down one night having
Speaker 3: some stir thriving like, oh, hey, Lucy, I was wondering,
Speaker 3: have you thought about a binding financial agreement. It's a
Speaker 3: very different conversation than maybe using Victoria and Lucy as
Speaker 3: an icebreaker, which I think can be you know, a
Speaker 3: little bit of a good stepping stone, So feel free
Speaker 3: to abuse that and use that however you like my friends.
Speaker 3: But we said before what you can use them for
Speaker 3: and how that works, whether it's a business or whether
Speaker 3: it is you know, inheritance. But can it be used
Speaker 3: for other stuff as well? So for example, if you
Speaker 3: planned on having a kid and it was agreed before
Speaker 3: time that you would take time out to look after
Speaker 3: that child, could you agree that your partner ends up
Speaker 3: paying you a sum of their income or puts it
Speaker 3: into super for you or something. Can that be in
Speaker 3: a binding financial agreement.
Speaker 5: Look, it's fantastic stick the people are having these conversations
Speaker 5: with their partner, whether or not that has a place
Speaker 5: in the actual agreement might not be appropriate. So when
Speaker 5: we write documents and agreements, we want them to be
Speaker 5: able to be really easily.
Speaker 4: Interpreted and applied.
Speaker 5: And you know, we don't want too many contingencies in
Speaker 5: the future that might not be able to be enforced.
Speaker 4: So it might not be in.
Speaker 5: Your best interest to have this really broad document that's
Speaker 5: trying to control everything.
Speaker 4: And there are some things that you're just going to
Speaker 4: have to approach as a couple.
Speaker 5: As life comes at you and what's appropriate at the time,
Speaker 5: But we really just want to take care of the
Speaker 5: nuts and bolts of your assets and things like agreements
Speaker 5: about what would happen if you had debts those Really,
Speaker 5: you know, it's like putting the rocks in the jar
Speaker 5: and then the sand might be all those things that
Speaker 5: you talk about and that flows through, but it might
Speaker 5: not all go in the agreement itself.
Speaker 4: But as long as you're talking about it, it's a
Speaker 4: complete plan, all.
Speaker 3: Right, Lucy. So maybe that one isn't something we can
Speaker 3: add to a BEE, But what are some other things
Speaker 3: we could add to bfas that we need to be
Speaker 3: aware of?
Speaker 4: Great question.
Speaker 5: The main thing that I would like to see your
Speaker 5: listeners protect themselves against in a BFA is sexually transmitted debt.
Speaker 4: So maybe you have a partner gree it's yeah, a business.
Speaker 5: Maybe they've got you know, I don't think we talk
Speaker 5: enough about gambling addiction, ye, addiction common.
Speaker 4: Yeah. On my first day of work as a lawyer,
Speaker 4: my boss.
Speaker 5: Said to me, if there's ever money missing and you
Speaker 5: don't know where it is, it'll be gambling.
Speaker 4: And that has really held true for me.
Speaker 3: So disappointing. That's such a good like a helpful piece
Speaker 3: of information to be given on your first day. We're
Speaker 3: also like heartbreaking in a way because it's so common.
Speaker 5: It is so common, and I think that people are
Speaker 5: not aware of it, so you know, just be aware
Speaker 5: that that is sexually transmitted.
Speaker 4: Debt by nature is often something that will be hidden.
Speaker 3: And yeah, exactly, And it's so hidden and people say like, oh, well,
Speaker 3: it must be a certain type of person, or it
Speaker 3: must be you know, somebody else that wouldn't happen to
Speaker 3: you know, people we know, but there's no profile. And
Speaker 3: I actually have girlfriends, numerous girlfriends whose partners have essentially
Speaker 3: fretted away thousands and thousands of dollars. It's not uncommon.
Speaker 3: It's really like it's heartbreaking. But they'll say, you know,
Speaker 3: my partner lost ten thousand dollars or my partner, you know,
Speaker 3: actually spent eighty thousand dollars over three years. Like I
Speaker 3: have heard these conversations not from our community, from my
Speaker 3: friendship groups.
Speaker 4: Yeah, absolutely, me too.
Speaker 5: In my work, it's actually a question that I ask
Speaker 5: every single client, is there a history problematic gambling? I
Speaker 5: don't make the mask. I say, if there was, this
Speaker 5: is what we would do. And I think that having
Speaker 5: your debt a dealt withinner bare fey means that you
Speaker 5: can walk away. You know, ending a relationship is hard
Speaker 5: enough as it is. And we also know that for
Speaker 5: women who take on that debt, there's so much shame
Speaker 5: that they should have known better, done better, being smarter.
Speaker 3: Oh, it's not on your because you weren't educated. Not
Speaker 3: everybody has an army of lawyers when they get into
Speaker 3: a new relationship, Like you don't swipe right on Tinder
Speaker 3: see their profile and also their debt levels, like that's
Speaker 3: not how the world works. But Lucy, we've even had
Speaker 3: money diarists more recently who have said, oh, my partner
Speaker 3: had a gambling debt or a debt that they know
Speaker 3: even just illegal style debts where they have taken out
Speaker 3: credit cards in their names or personal debts and they've
Speaker 3: been left in lurch with that and had to pay
Speaker 3: it off. Like this is the kind of thing that
Speaker 3: you could be protected from. That's really important, Like these
Speaker 3: aren't little things.
Speaker 4: That's right.
Speaker 5: And I think also in this current economic climate where
Speaker 5: businesses are really suffering, you know, setting aside gambling debts,
Speaker 5: this is a reality there's going to face many small
Speaker 5: business owners, especially people with leases that are secured or
Speaker 5: we just really want to make sure that all of
Speaker 5: that is dealt within your BFA.
Speaker 4: You know that there's certainty that when you want to leave,
Speaker 4: you can leave.
Speaker 3: Yeah, and that is so important because we're not just
Speaker 3: talking about oh, okay, protect the asset you already have.
Speaker 3: You might not have any assets and still really think
Speaker 3: that a BFA is something that is right for you.
Speaker 4: Correct.
Speaker 3: Yeah, So obviously, given you're on this episode, Lucy, we
Speaker 3: as she's on the money, think it's really important to
Speaker 3: get proper advice around these things. And not every single
Speaker 3: person in a relationship needs to get a binding financial agreement.
Speaker 4: Right, that's correct.
Speaker 3: So if we do feel like we need one, where
Speaker 3: do we go? How do we set one up? You
Speaker 3: said before, we shouldn't just go on Google and get
Speaker 3: a bot to do it. So Lucy, what do we do?
Speaker 5: Absolutely? So, I have a stable of lawyers who I
Speaker 5: refer to. Not all family lawyers do binding financial agreements,
Speaker 5: not all of them believe that they are enforceable in
Speaker 5: majority of situations, and not all of them are able
Speaker 5: to deliver it in a cost effective manner. So a
Speaker 5: binding financi agreement is only the output is only as
Speaker 5: good as the input, and so it's not a matter
Speaker 5: of simply filling out an online questionnaire and your lawyer
Speaker 5: will draft it. And so some lawyers really don't offer
Speaker 5: them because the time that it takes with a lawyer
Speaker 5: one on one to discuss the strategy what's appropriate, your
Speaker 5: partner will need a lawyer. So my recommendations to find
Speaker 5: a lawyer are Facebook groups. Your local Facebook group. I
Speaker 5: always think word of mouth referrals are the best.
Speaker 3: Couldn't agree more. I'm partial to a good Facebook group louse.
Speaker 4: True, Well, she's on the money is local to everyone.
Speaker 5: So I might share my list of there's a dozen
Speaker 5: family lawyers who you know comes up in a state
Speaker 5: planning all the time. And I'm like, this covers you
Speaker 5: in your death, this does not cover you in your lifetime.
Speaker 5: You need to do this as well, And so I
Speaker 5: have a list of names of firmsuit I.
Speaker 3: Oh my god, yes, we would adore that. I'll put
Speaker 3: it on a social media post and we'll also add
Speaker 3: it to our website so that people can always access them.
Speaker 4: Awesome, Well, that's a really good starting shortcut. I have
Speaker 4: prequalified them actually only last month I was like, Okay,
Speaker 4: who does them? I am going to highly recommend working
Speaker 4: with a lawyer.
Speaker 5: And if you are at the stage where you have
Speaker 5: an asset to protect, then I think that you're at
Speaker 5: the stage where you just need to invest invest in
Speaker 5: this advice.
Speaker 4: I'm in a preventative area of law.
Speaker 5: Estate planning prevents fights, bfas prevent fights, and I think that,
Speaker 5: you know, I just can't stand by the value anymore
Speaker 5: than that.
Speaker 3: So talking about it being worth it, obviously, if you've
Speaker 3: bought a property and had that for a number of
Speaker 3: years before getting into a relationship, it's going to have
Speaker 3: been a really significant financial investment. So in my mind
Speaker 3: that means that you probably should be spending a couple
Speaker 3: of thousand dollars to protect that asset. Like it's kind
Speaker 3: of like an insurance policy that you're taking out in
Speaker 3: a way on your relationship, which seems a little bit morbid,
Speaker 3: but we know this. That's tell us, Lucy that fifty
Speaker 3: percent of marriages actually end in divorce, And while that's
Speaker 3: not a nice thing to comprehend, it kind of justifies
Speaker 3: why we are actually doing these things. So how much
Speaker 3: will a binding financial agreement set us back.
Speaker 4: It is going to vary so much.
Speaker 5: And I will say that when I created that list
Speaker 5: of qualified lawyers saying they did do it, they all
Speaker 5: said it is an expensive area of law because it
Speaker 5: all depends on getting your actual facts, how you truly
Speaker 5: live values of things.
Speaker 4: So I would say between three thousand plus and.
Speaker 5: Different firms will vary in price enormously, and so you
Speaker 5: know it is worth taking that half a day off
Speaker 5: and to ring around maybe the whole dozen on the list,
Speaker 5: and you will find someone in your price range and
Speaker 5: it will be worth it.
Speaker 3: And I don't know how you feel about this, Lucy,
Speaker 3: but I feel like when it comes to having a lawyer, yeah,
Speaker 3: you can absolutely do remotely, but it is actually quite
Speaker 3: important to have one in your state just because there
Speaker 3: are different rules and regulations.
Speaker 5: Well, with family law, I do not have any concerns
Speaker 5: referring people across the country.
Speaker 2: So a lot of them take that back to my friends.
Speaker 5: No, yeah, this area of Laura, I think has such
Speaker 5: a national focus. Wills it definitely state by state, but
Speaker 5: for finding financial agreements, the principles are national.
Speaker 3: Well, that is why you are here. And I'm not
Speaker 3: directing this conversation this time.
Speaker 5: When a client comes to see me, I always say
Speaker 5: that ninety percent of the work has already been done.
Speaker 4: All we need you to do is do.
Speaker 5: You research, talk to a family lawyer, have that first consult,
Speaker 5: and they will coach you through how to introduce this
Speaker 5: concept that you want a BFA to your partner. So
Speaker 5: literally they'll be able to say, in your exact circumstances,
Speaker 5: these are the top three reasons why you're reallyship is
Speaker 5: going to benefit from it. And so let the lawyer
Speaker 5: coach you in what to say. I literally say to people,
Speaker 5: do you want to practice talking about it? When I'm
Speaker 5: trying to coach them through running a will or something
Speaker 5: like that, I say, let's have that practice conversation.
Speaker 3: And it really helps, It really really does. And I
Speaker 3: think that helps in any circumstance when it comes to
Speaker 3: a sticky conversation or one that you're not super confident.
Speaker 3: Having role playing with a friend or a family member
Speaker 3: or your lawyer can be really really effective. But talking
Speaker 3: about all of this stuff makes it seem so much
Speaker 3: more common than it actually is. And according to a
Speaker 3: little bit of research I did before the podcast in Australia,
Speaker 3: Canstar says that only six percent of couples actually have
Speaker 3: bfas Lucy. Why is the percentage so low?
Speaker 5: I think that this speaks so beautifully to one of
Speaker 5: the things that I love about Australian culture so much,
Speaker 5: and that is that we are optimistic and we have
Speaker 5: a Shelby right attitude.
Speaker 3: So I love that in one I think so too
Speaker 3: because I also try to do some research into how
Speaker 3: many Americans have prenups, because this is similar in a
Speaker 3: way to a prenup, and the percentages did range too
Speaker 3: significantly for me to go, Okay, cool, this is what
Speaker 3: it was, but it was significantly more than six percent.
Speaker 4: I think that the.
Speaker 5: Second part would be that it is very true that
Speaker 5: binding financial agreements are commonly set.
Speaker 4: Aside by the courts, so they are not bulletproof.
Speaker 5: And again that goes back to they're only as good
Speaker 5: as the input and the lawyer that you use, and
Speaker 5: they're not appropriate in every single circumstance. But your lawyer
Speaker 5: will tell you that, They'll say, don't spend your money,
Speaker 5: it's not worth it. It's too late at this situation. The
Speaker 5: earlier you go and get advice, and the earlier you
Speaker 5: put this in instead of waiting for the event that
Speaker 5: makes you go, wow, like the pennies dropped, I need it,
Speaker 5: And then it might be that it's really difficult for
Speaker 5: the courts to agree that it was made in good
Speaker 5: faith and without a little bit of pressure.
Speaker 4: So a really great example would be your mum or
Speaker 4: dad has passed away and we know that.
Speaker 5: There's an inheritance coming of two million dollars, and you go,
Speaker 5: right now is the time I need a BFA.
Speaker 4: Of course your partner signed it.
Speaker 5: They were under duress, Like, but you know, if you
Speaker 5: go and do it at the start of the relationship,
Speaker 5: when we're not contemplating an exact circumstance, it's just going
Speaker 5: to happen more weight if you both went into it
Speaker 5: without that pressure.
Speaker 4: The very common one that just won't apply to.
Speaker 5: Your audience is when they're signed within a week or
Speaker 5: a couple of days before a marriage.
Speaker 3: Oh yeah, but I think that that's really applicable at
Speaker 3: the end of the day because we might, you know,
Speaker 3: have a demographic of people who are going through that
Speaker 3: situation that go, oh my gosh, that's so true, like
Speaker 3: that's you know what I did, or that's something that
Speaker 3: I was pressured to do, in which case might not
Speaker 3: stand up in the way that you think it's going to.
Speaker 5: Yeah, that's right, And I think then the next important
Speaker 5: point is don't do them under pressure. You can do
Speaker 5: them at any point in your relationships, so you know,
Speaker 5: take your time, go and get the independent legal advice.
Speaker 5: But I think that that statistic probably speaks to our nature,
Speaker 5: the uncertainty that they might not hold up.
Speaker 4: And also just that.
Speaker 5: I feel like people need to shift their thinking about
Speaker 5: all of these investments.
Speaker 4: And Cheese on the money, does this.
Speaker 5: So well, championship so kind no think championing in this advice.
Speaker 4: As an investment.
Speaker 5: And you know, we really need to start thinking about
Speaker 5: all of these things as just part and parcel of
Speaker 5: being a homeowner or in a relationship, and they're just
Speaker 5: the cost of doing modern day life.
Speaker 3: I couldn't agree more. And Lucy, we're going to take
Speaker 3: a really short break and then I'm going to ask
Speaker 3: you some questions about when bfas don't work and ideas
Speaker 3: for you if you don't want one, don't go anywhere.
Speaker 3: All right, Lucy, we are back. And before you mentioned
Speaker 3: that you don't have to have any assets to have
Speaker 3: a BFA, but you might anticipate some things in the future,
Speaker 3: so it might be worth setting one up to make
Speaker 3: sure that you're not doing it under due rest, which
Speaker 3: is very good advice. But if you don't have any
Speaker 3: assets and you don't think that there's anything coming in
Speaker 3: the future, does that mean that we probably don't need one.
Speaker 5: Well, and starting point is let's look at the nature
Speaker 5: of your relationship, and maybe you don't need one, but
Speaker 5: you want some certainty about what you're contributing to your
Speaker 5: partners asset building or if you're paying some of their mortgage,
Speaker 5: paying them rent.
Speaker 4: That might be why you want something.
Speaker 5: If you are not sure, if you're asking yourself this question,
Speaker 5: it means that you probably should get advice because if
Speaker 5: it's even a question in your mind, that to me
Speaker 5: is the trigger that you should.
Speaker 4: Talk to a lawyer. A lot of lawyers will give
Speaker 4: an initial consult.
Speaker 5: For either free or very cheap, especially if you're not
Speaker 5: asking them to draft information. And what I think is
Speaker 5: invaluable that you're going to take out of that meeting
Speaker 5: is understanding the trigger point when you will need one.
Speaker 5: So all of those roomors out there that are like
Speaker 5: don't leave a tooth at someone's house and then you're
Speaker 5: not a de facto partner And.
Speaker 4: Oh my gosh, is that true?
Speaker 3: Is that how we get out of it? Lucy, No,
Speaker 3: not at all. So you're saying I could have actively
Speaker 3: left a toothbrush at Steve's house much earlier than I did.
Speaker 4: You should have.
Speaker 3: Yeah, honestly, I should have made my mark earlier than
Speaker 3: I did.
Speaker 4: Yeah, we're so little. Yeah, sayings like that, they're just myths.
Speaker 5: But what you will find out from your lawyer is
Speaker 5: the parts of them that are true and what does
Speaker 5: constitute a domestic relationship And it's going to apply.
Speaker 4: To your assets in your BFA.
Speaker 5: But it's also really handy to know for things like
Speaker 5: you're super and although all these other areas of law,
Speaker 5: but I just think if you went and spent four
Speaker 5: hundred bucks on an hour with a lawyer if you're not.
Speaker 4: Sure if you need one, it's just going to be
Speaker 4: the best investment.
Speaker 3: I absolutely agree. And four hundred dollars can seem like
Speaker 3: a lot to swallow, but at the end of the day,
Speaker 3: if you're at a point where you're like, I don't
Speaker 3: know if I need a BFA and I'm moving in
Speaker 3: with this person or starting a relationship or whatever your
Speaker 3: situation might be you don't need to get one, but
Speaker 3: if you're really questioning it, four hundred dollars is a
Speaker 3: very reasonable amount of money to spend. To be told,
Speaker 3: don't worry about the three thousand dollar BFA. It's a
Speaker 3: very good amount of money to you know, have a
Speaker 3: bit of peace of mind and get some advice that
Speaker 3: is going to be tailored to your personal situation, because
Speaker 3: that lawyer is not just going to talk at you.
Speaker 3: They're going to ask a few personal questions, Understand what
Speaker 3: you do, your partner does, how it works, and they'll
Speaker 3: give you advice that's specific to you because unfortunately, Lucy,
Speaker 3: we can't do all that on a podcast.
Speaker 5: No, that's right, and it'll carry you through this relationship
Speaker 5: and future ones. You'll know, okay, this is the timeline,
Speaker 5: or this means are the circumstances about sharing a home?
Speaker 5: You know it's there is actually an amazing resource on
Speaker 5: a government website that I sent to my clients, and
Speaker 5: it asks questions like, if you live together, if you
Speaker 5: have a cleaning roster, that probably means you're not in
Speaker 5: a de facto relationship, but if you share cleaning, it
Speaker 5: means that you are in it. When you plan holidays,
Speaker 5: you know, so there's I'll share it for the group
Speaker 5: because I would get to put.
Speaker 3: The link for that in the show notes so that
Speaker 3: you guys can all access it. But I do feel
Speaker 3: like that could be really helpful. I don't have a
Speaker 3: cleaning roster. I have my cleaning schedule and that's just
Speaker 3: for me. Does that mean I'm in a de facto
Speaker 3: relationship Lucy, you're an independent woman? Independent woman? Or moving
Speaker 3: on from that, We've talked about it on the show before,
Speaker 3: and we've talked about it just before. You've said that
Speaker 3: our lawyer might be able to equip us to have
Speaker 3: these awkward conversations, and we said, blame it on Victoria
Speaker 3: or Lucy if you want to bring it up, but
Speaker 3: let's broach this. How do we broach having these kind
Speaker 3: of conversations with our partners? It's so awkward sometimes. Do
Speaker 3: you have some hot tips if we don't want to
Speaker 3: blame it on Lucy and Victoria or go directly to
Speaker 3: a lawyer.
Speaker 5: I think, I mean for the people who are planning
Speaker 5: to do this, I'm going to say that you are
Speaker 5: by nature responsible your planners, and I just think that
Speaker 5: if you broach it with your partner and they're surprised.
Speaker 5: I'm going to be surprised because you know, your listeners
Speaker 5: are educated and savvy, and I think that that should
Speaker 5: surely be coming through in their relationships.
Speaker 3: Too, So I would hope so.
Speaker 5: Yeah, yeah, So I think that Number one, don't assume
Speaker 5: that your partner is going to think that this is coming.
Speaker 4: From a bad place.
Speaker 5: They will probably already know you as someone who is
Speaker 5: a planner and responsible and they'll just be like, oh, yeah,
Speaker 5: that's just true to Victoria's style.
Speaker 3: It's going to stereotype you straight to type a my friend.
Speaker 3: They're going to see it a mile off.
Speaker 4: So don't worry about it.
Speaker 5: They already know that about you, and it's probably one
Speaker 5: of the things that they love about you.
Speaker 3: It's cute that you thought that they wouldn't see this
Speaker 3: coming though, Hey, yeah, exactly.
Speaker 4: They know you better than you think.
Speaker 5: And number two, I think when people want to have
Speaker 5: a conversation or and the other is avoiding it, I
Speaker 5: say to them.
Speaker 4: Just ask them what's the harm, Like, what's the harm
Speaker 4: in giving me half an hour and you know, or
Speaker 4: what's the harm in listening to this podcast together?
Speaker 5: What's the harm in us both having that free chat
Speaker 5: with a lawyer, that three fifteen or whatever they all do.
Speaker 5: I think if you can hold their hand and get
Speaker 5: them from step A to step B and then step
Speaker 5: B to step SEA, and if it applies, the lawyer
Speaker 5: will do the rest of the work. You've just got
Speaker 5: to introduce the topic and just don't be afraid. It's
Speaker 5: your future that's at stake.
Speaker 3: I agree, And I think that the other thing. I've
Speaker 3: said this on the podcast before, but it's something that's
Speaker 3: seen me really well through all good conversations, whether it
Speaker 3: is with my friends, my family, my partner, you know,
Speaker 3: people that I work with. I've always found that approaching
Speaker 3: things from an emotional perspective, not crazy emotional, but an
Speaker 3: emotional perspective instead of a accusatory perspective has really helped.
Speaker 3: So saying hey, Lucy, you make me feel like XYZ
Speaker 3: is much better than saying Lucy you always because it
Speaker 3: changes the tone of the conversation to hey, this might
Speaker 3: not actually be reality. This is just my experience, as
Speaker 3: opposed to just being straight accusatory of it. So maybe
Speaker 3: saying things like hey, I feel like this is something
Speaker 3: we should consider, not we need to consider this can
Speaker 3: be a really soft way of starting a conversation like that.
Speaker 3: That kind of promotes kindness and promotes a really soft
Speaker 3: and easy conversation, because I think that one thing that
Speaker 3: we easily forget in conversations like this is you've been
Speaker 3: ruminating about it, You've been thinking about it. Maybe you've
Speaker 3: already spoken to a lawyer, so you're ready for this conversation.
Speaker 3: Your partner might not be privy to all of that,
Speaker 3: so this might be the very first time they're hearing
Speaker 3: about it, So you kind of need to tread gently
Speaker 3: and kindly because they might not be in the right
Speaker 3: mind space. It might not necessarily mean oh my gosh,
Speaker 3: they weren't receptive to it. It might just mean they
Speaker 3: need an hour or two to go, oh, okay, that's
Speaker 3: the conversation we're having today. I thought we were just
Speaker 3: going to talk about our grocery list, or oh, I
Speaker 3: thought we're going to talk about going to your mum's
Speaker 3: on Saturday. So I think it's really important to approach
Speaker 3: the conversation really kindly and softly, remembering that you're obviously
Speaker 3: more educated and more equipped to have that conversation in
Speaker 3: the moment, and it's actually okay if they're not ready.
Speaker 3: It doesn't necessarily mean they don't want to have it.
Speaker 3: They might not be surprised, but don't be offended if
Speaker 3: they're like, oh what, I don't want to have this
Speaker 3: conversation right now because they just might not have the
Speaker 3: mental capacity, which I think is very fair as well.
Speaker 5: Absolutely, I see it all the time in my estate
Speaker 5: planning practice.
Speaker 4: Nobody wants to.
Speaker 5: Do their will and no, thank you, And I say
Speaker 5: that my clients have a six month consideration phase. First
Speaker 5: of all, they identify that they have an issue, and
Speaker 5: then they think about it, and then they filter through
Speaker 5: all the different solutions they could have, and then they
Speaker 5: arrive at the time where they're ready to do something
Speaker 5: about it. Partner, the respect of having their own consideration
Speaker 5: phase and the strength of the document hinges on everybody
Speaker 5: doing it voluntarily.
Speaker 3: So yeah, I wouldn't agree more liter you. And I
Speaker 3: know deeply that it's always an event that promotes people
Speaker 3: to do these things, and that's not necessarily the best
Speaker 3: time to do them either, So speaking about making sure
Speaker 3: we're doing them voluntarily, and you said before that obviously
Speaker 3: if a BFA is done under fraud or dures, it's
Speaker 3: not actually going to stand to the test of time
Speaker 3: and the courts are maybe going to throw it out.
Speaker 3: Are there any other occasions where bfas could be completely
Speaker 3: null and void?
Speaker 4: Absolutely?
Speaker 5: If you are not truthful with the assets, that you
Speaker 5: won't when you go into the BFA. So if you're
Speaker 5: hiding part of the picture, then the BFA the context
Speaker 5: that was made in is just going to be irrelevant.
Speaker 5: So full and frank disclosure. It's also the best way
Speaker 5: to keep your lawyer's fees down, just you know, be.
Speaker 3: Yeah, it make seems less complicated, correct, Yeah, we can
Speaker 3: get it right from the start, as opposed to you know,
Speaker 3: pushing out and reiterating and changing and going Actually we
Speaker 3: need an entirely new agreement. And I mean, I'd like
Speaker 3: to think that everybody has just little hidden emergency funds
Speaker 3: and apartments off to the side that they haven't told
Speaker 3: their partner about. But the reality of this is usually
Speaker 3: it's hidden debts, isn't it, Lucy.
Speaker 4: Correct, Yeah, that's right.
Speaker 5: So yeah, if the information wasn't full and frank, if
Speaker 5: there was any pressure to enter into it, if you
Speaker 5: didn't get independent league advice, So if maybe your lawyer
Speaker 5: drafted it and they signed it without a lawyer explaining
Speaker 5: it to them, that's going to.
Speaker 4: Be an issue.
Speaker 5: There are a lot of circumstances where it can be
Speaker 5: set aside, if your lawyer hasn't drafted it to comply
Speaker 5: with the legislation, or if you've used a botch that
Speaker 5: you know, miss some bits. But the point that I
Speaker 5: want to make is that you are no worse off
Speaker 5: for trying. And if it is thrown out, what will happen.
Speaker 4: Is that you'll be in the family court and you'll
Speaker 4: be seeking a settlement that.
Speaker 5: The court will approve, and you're no worse off for
Speaker 5: having tried with a BFA first. Or maybe a part
Speaker 5: of it will be upheld, you know, maybe it will
Speaker 5: uphold it in terms of your parents' inheritance, but it
Speaker 5: won't stand up for the property that you built together.
Speaker 5: So yeah, that would be the key takeaway that with
Speaker 5: the law, unfortunately, nothing is watertight.
Speaker 4: But we still think that you're better off for giving
Speaker 4: it a go than not.
Speaker 5: Ah.
Speaker 3: I feel like that's super interesting and actually really positive
Speaker 3: because you're right, it's better to just have tried than
Speaker 3: to have not tried at all. So keeping all of
Speaker 3: this in mind, if someone listening just is not convinced
Speaker 3: that a BFA is the way to go. What advice
Speaker 3: would you give them, Lucy, talk.
Speaker 5: To your friends who have ended relationships about the reality
Speaker 5: of how simple that was or how difficult that was.
Speaker 5: Do they wish they had work?
Speaker 4: Yeah, Lucy, I think you know, you can listen to us.
Speaker 5: But it is those personal stories that I know move
Speaker 5: people from into decision or a fixed note.
Speaker 4: So yes, and I say, go and talk to so
Speaker 4: and so.
Speaker 5: Have you ever known anyone who has been divorced, Maybe
Speaker 5: it's an art maybe it's an older family friend, and.
Speaker 4: Just say what was it like? And you know, they
Speaker 4: put separation and divorce up there with the four worst
Speaker 4: life events, don't they up there?
Speaker 3: They do. They say it's one of the most traumatic
Speaker 3: events you can go through, which I'm not. I mean,
Speaker 3: I'm trying not to be dramatic on this podcast, but Lucy,
Speaker 3: I am always dramatic on this podcast. And I mentioned
Speaker 3: this statistic before that fifty percent of marriages and in divorce.
Speaker 3: You're saying that fifty percent of people who I am
Speaker 3: married are going to experience one of life's most significant
Speaker 3: traumatic events. Like that justus really not good?
Speaker 4: Yeah? Absolutely, I think that human need for certainty. We
Speaker 4: just can't get it when we're going through a separation.
Speaker 5: But if you have this element of your relationship taken
Speaker 5: care of, what happens to this debt, what happens to
Speaker 5: this asset, that certainty will just you know, carry you
Speaker 5: through so much through a really difficult time.
Speaker 3: Yeah, and I've said this before again on the podcast
Speaker 3: because I'm just getting to a point where I'm a
Speaker 3: bit of a broken record my friends. But one of
Speaker 3: the things that I really like about bfas or you know,
Speaker 3: setting yourself up from the very beginning, or you know,
Speaker 3: working out what would happen to your assets if you
Speaker 3: did divorce, is that you're actually in a really special
Speaker 3: position at the beginning of your relationship. Like everybody is
Speaker 3: really excited about moving in together or maybe getting married,
Speaker 3: or you're maybe really excited about the new relationship, and
Speaker 3: at that point in time, you actually want the best
Speaker 3: for each other. Like I want the best for you, Lucy,
Speaker 3: and hopefully you want the best for me, and you
Speaker 3: do respect that. Maybe I do want an inheritance protected,
Speaker 3: or that house that I worked my entire life for
Speaker 3: before I met you, I want to protect that, and
Speaker 3: you're very likely to respect that in the moment because
Speaker 3: we're so in love and we want the best for
Speaker 3: each other. But if we were having that conversation when
Speaker 3: we're in the middle of a divorce and Lucy are
Speaker 3: cheated on you, so you're bitter at me, you don't
Speaker 3: want the best for me at that point in time,
Speaker 3: and we're having a conversation where you don't like the
Speaker 3: other person and therefore feel like maybe you're owed something
Speaker 3: or maybe you don't actually want them to have a
Speaker 3: better outcome. So I really like the idea that we
Speaker 3: get to have this conversation about a binding financial agreement
Speaker 3: at the start of a relationship, if possible, or at
Speaker 3: any point that you're actually in a really good mind space,
Speaker 3: because it means that at the end of the day,
Speaker 3: you can go, you know what, whatever happens happens. We
Speaker 3: might not love each other anymore, we might not want
Speaker 3: anything to do with each other, but this agreement, like,
Speaker 3: I'm pretty happy with it because I wanted the best
Speaker 3: for you and you wanted the best for me, and
Speaker 3: we were both really comfortable with it at the time.
Speaker 3: And I think that for me, that's a really nice
Speaker 3: part of the process where it's not actually like, Lucy,
Speaker 3: I want half of your stuff. It's like, hey, we
Speaker 3: agreed to this, like when we just wanted the best.
Speaker 5: Say that all the time with a state planning as well,
Speaker 5: I'm not asking you to do anything that I'm not
Speaker 5: also signing up to. Yeah, exactly, I can't control what
Speaker 5: your lawyer says to you on the other half of
Speaker 5: a BFA matter. And you know, they might give you
Speaker 5: advice that says that you deserve more or that you.
Speaker 4: Know, paying rent is actually contributing to the equity. And
Speaker 4: I'm happy to roll that dice.
Speaker 5: Because we're just going to listen to the advice and
Speaker 5: take it as it comes. And yeah, I'm not asking
Speaker 5: you to do anything that I'm not doing too.
Speaker 3: Yeah, And I think that that's, you know, a really
Speaker 3: important point, because we're not recommending considering a BFA to
Speaker 3: put you in the best possible position. It's actually to
Speaker 3: put your relationship in the best possible position, which unfortunately
Speaker 3: some people just don't see it that way.
Speaker 2: Oh my goodness, that is so interesting. I honestly had
Speaker 2: no idea how many little bits and pieces there were
Speaker 2: to think about. I guess finding financial agreements are something
Speaker 2: that aren't that commonly talked about. I want to say,
Speaker 2: and they aren't.
Speaker 3: I mean they are if you're in the She's on
Speaker 3: the money community. We're all financially savvy people, but it's
Speaker 3: one of those things that we need to get nitty
Speaker 3: gritty on these topics. And Jess, I think my favorite
Speaker 3: learning from this was when Lucy said that, actually, if
Speaker 3: you don't have a toothbrush at your partner's house, it
Speaker 3: doesn't mean you're not in a relationship with them, which
Speaker 3: is a very common myth that people say, Oh, if
Speaker 3: you don't put a toothbrush at their house, you don't
Speaker 3: actually have a de facto relationship. Lucy busted that one.
Speaker 3: It is a myth, which is kind of sad for
Speaker 3: all of you who maybe have been doing that. But Jess,
Speaker 3: did you put a toothbrush at James's house early on
Speaker 3: or were you one of those people that just waited
Speaker 3: till you moved in together.
Speaker 2: No, I'm pretty sure I set up shop in yeah,
Speaker 2: please very quickly. I like my luxuries. The three in
Speaker 2: one shampoo, conditioner and body wash was really not going
Speaker 2: to cut it for me, so I made sure I
Speaker 2: came prepared.
Speaker 3: Oh my gosh, did you just take it to his
Speaker 3: house every time or did you literally just like all right,
Speaker 3: cool popping this one in your shower. Also, I have
Speaker 3: a toothbrush here. I've actually just cleared out one of
Speaker 3: your drawers. It's mine now, Is that what I happened?
Speaker 2: Definitely the latter one. I just moved in and set
Speaker 2: up camp pretty much. But enough about that. I will
Speaker 2: definitely make sure that we link that website in the
Speaker 2: show notes. That sounds like it's going to be really
Speaker 2: handy and worth checking out if you're interested in learning
Speaker 2: a little bit more, because you know, as we covered,
Speaker 2: there's a lot to take into consideration when you're thinking
Speaker 2: about BFAS And a huge thank you of course to
Speaker 2: Lucy for sharing her expertise and her knowledge. Will also
Speaker 2: have her linked in a show notes as well.
Speaker 3: Of course, and hopefully jess we can convince her to
Speaker 3: chime in more often on the podcast when we need
Speaker 3: a legal representative, which I think would be really helpful.
Speaker 3: So if you have any other suggestions or questions for Lucy,
Speaker 3: please shoot them through to our DMS or comment on
Speaker 3: our Instagram. We are always watching and always open to
Speaker 3: questions that you guys might have. But Jess as always.
Speaker 3: Albeit you haven't featured a lot on this podcast, I
Speaker 3: do have to wrap it up here, so as always,
Speaker 3: just before we head off, with like to acknowledge and
Speaker 3: pay respect to Australia's Aboriginal and tourist Raight Islander people's
Speaker 3: they're the traditional custodians of the lands, the waterways and
Speaker 3: the skies all across Australia. We thank you for sharing
Speaker 3: and for caring for the land on which we are
Speaker 3: able to learn. We pay our respects to elders past
Speaker 3: and present, and we share our friendship and our kindness.
Speaker 4: The advice shared.
Speaker 2: On She's on the Money is generally nature and does
Speaker 2: not consider your individual circumstances. Shees on the Money exists
Speaker 2: purely for educational purposes and should not be relied upon
Speaker 2: to make an investment or a financial decision. And we
Speaker 2: promise Victoria Divine is an authorized representative of Australia Pacific
Speaker 2: Funds Management Proprietary Limited ABAN three four one three two
Speaker 2: four six three two five seven AFSL three three nine
Speaker 2: one five one.
Speaker 3: And Lucy's a legit lawyer. Guys like that wasn't fake news,
Speaker 3: Like saying Jess is a lawyer for example, see you
Speaker 3: next week. Guys, Bye the