What Is a Deed of Family Agreement

A deed of family agreement, or DFA, is a legal document that outlines the terms of an agreement between family members. Sometimes referred to as a family trust deed or family settlement agreement, a DFA is often used to create a framework for how assets will be distributed among family members after the death of the owner.

The purpose of a DFA is to provide clear guidelines and avoid disputes that can often arise in the absence of a formal agreement. It can also help to minimize taxes and ensure that assets are distributed according to the wishes of the owner.

A typical DFA will include sections such as the purpose of the agreement, a complete list of assets and liabilities, how the assets will be distributed, and any contingencies that may arise. For example, a DFA may include provisions for how to handle disputes between family members or how to distribute assets if a beneficiary predeceases the owner.

One common use for a DFA is to avoid probate. Probate is the legal process of settling an estate after someone dies. It can be time-consuming, expensive, and emotionally draining for family members. By creating a DFA, the owner can transfer ownership of assets to the beneficiaries while they are still alive, avoiding probate altogether.

Another benefit of a DFA is that it can help to minimize estate taxes. Depending on the value of the assets being transferred, estate taxes can be a significant burden on the beneficiaries. A well-crafted DFA can help to minimize the tax burden by structuring the transfer of assets in a way that is most advantageous.

It is essential to work with an attorney experienced in estate planning when creating a DFA. There are many legal and financial considerations to take into account, and an experienced attorney can ensure that the agreement is structured correctly and meets all legal requirements.

In conclusion, a deed of family agreement is a legal document that can provide clear guidelines for the distribution of assets among family members. It can help to avoid disputes, minimize taxes and simplify the probate process. It is essential to work with an attorney experienced in estate planning to ensure that the DFA is structured correctly and meets all legal requirements.