When I am engaged to draft a Binding Financial Agreement (BFA) (which sets out what happens to their property in the event of separation) clients are often surprised when I ask about their estate plan. BFAs are not designed to deal with what is to occur in the event of death- their sole purpose is to deal with property and spouse maintenance after separation. If you never separate then your BFA will never take effect.
Some clients want their BFA to match their estate plan (treating separation and death as the same). This is usually the case where both parties are individually wealthy and each wants their own children from previous marriages to inherit their full estate because they know that the other party is already well catered for due to their own financial resources.
I ask my clients to envisage themselves dying in circumstances where they are still blissfully happy with their present partner. Do they feel the same way about the division of their estate in those circumstances as they would if there was a separation? Often some clients find that they would be more generous to their spouse in their estate plan, than they will be in their BFA.
These are things which you need to consider when you go down this path and we are happy to explore with you all the different options.
Ann Northcote is Family Lawyer at Farrar Gesini Dunn, Canberra Office.