What Makes a Financial Agreement Binding?
For the agreement to be binding, each party must secure a certificate of independent legal advice signed by a solicitor. Note that one solicitor CANNOT act for more than one party to a financial agreement. Before providing that certificate, that solicitor needs to do the following:
- Review the agreement;
- Take detailed instructions on the financial circumstances and all other legal matters relevant to the potential outcomes in a separation; &
- Provide legal advice to the client prior to signing the certificate as to:
- the effect of the agreement on the rights of the client;
- the advantages and disadvantages, at the time that the advice was provided, of the client making the agreement
This entire process can take several weeks, so clients need to account for this time when preparing to sign a BFA. To make sure nothing is missed, it is best to relay to their lawyer all the significant assets and liabilities and whether and when their de facto relationship or marriage has began. Hoe Lawyers has binding financial agreement lawyers in Perth whom you can talk to for all enquiries about BFAs.
When Can I Enter into a Binding Financial Agreement?
A person can enter a Binding Financial Agreement anytime before a relationship by cohabitation or marriage has commenced, during or after the relationship, and even after separation. A Binding Financial Agreement family lawyer can assist a client with recommended split of assets that would be likely to be ordered by the Family Court.
Entering into a Binding Financial Agreement can prevent the Courts from interfering with pre-agreed property distribution. This allows both parties to have a semblance of certainty at a trying time. It also avoids the need for the separated parties to get together at the risk of immense conflict to discuss how resources should be divided.
Contact Hoe Lawyers if you need a Binding Financial Agreement lawyer.
How Binding Are Financial Agreements?
Financial agreements are not simple documents that can be written and signed without help from lawyers. For a financial agreement to be binding, the parties involved must not only provide full and frank disclosure of their assets and liabilities, they must also do the following:
- obtain separate and independent legal advice certified in writing; &
- have solicitors draft, review and then assist in signing the agreement;
- ensure strict compliance with, and express references to, the correct sections of the applicable legislation to prevent the agreement from being set aside
It helps to have Binding Financial Agreement lawyers ensure that no essential steps are skipped and for other reasons discussed below.
Why Are Lawyers Needed in Binding Financial Agreements?
In Western Australia, parties who wish to enter a Binding Financial Agreement will need 2 experienced and independent BFA lawyers. As drafting a BFA can be a complicated process, it is necessary to work with lawyers who have extensive knowledge of the technical legal requirements to ensure the BFA is legally valid and binding. Improperly prepared BFAs rendering them legally invalid have been known to cause huge financial problems to the party who stands to lose assets to the other.
The BFA terms need to be clearly and fully drafted before both parties to it seek legal advice on it. This is where they will learn and understand the effects of that BFA when it comes to their individual financial rights. Additionally, they will learn about the pros and cons of entering into that BFA.
A breach of an essential term of a BFA by either party will enable the other party to apply to the courts to enforce the BFA. The Court can then enforce those terms as if they were orders of the court with even more serious consequences if they are contravened.
Call Hoe Lawyers if you need Binding Financial Agreement lawyers in Perth.
What Is the Difference Between Consent Orders and a Binding Financial Agreement?
Both these documents allow couples to formalise their agreement to divide their property with their spouse or de facto partner after separation or divorce in a legally binding way.
Consent orders are written agreements between parties that have been approved by the court and converted into orders when a client files an application in the Family Court. Those orders function just like court orders made by a judge after a final hearing, even if you have never been inside a courtroom.
A Financial Agreement is a legal document that indicates how your assets should be divided in case of separation without any intervention from the courts. As there are almost always quicker and cheaper, a Binding Financial Agreement is often preferred by clients.
What Are the Benefits of a Binding Financial Agreement?
The advantages of BFAs over consent orders include but are not limited to the following:
- No need as detailed a list of assets and liabilities as the application for consent orders;
- No need to be scrutinised and approved by the Court beforehand;
- Cheaper and faster than applying for consent orders;
- Can acknowledge blended family arrangements;
- Simplify and clarify the division of assets upon separation without any litigation in Court; &
- Can be signed before separation has taken place and even before a relationship has commenced.
A BFA is just like any other planning tool that you can utilise for your financial security. It does not necessarily mean that you lack faith in your relationship. On the contrary, it is one of the ways that couples can show each other their willingness and desire to ensure the financial security and emotional comfort of each other in the unfortunate event that the relationship fails – like a form of insurance.
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A BFA is a document that needs to be drafted carefully by someone with extensive experience and skills. Entering a BFA allows spouses and de facto partners to make the responsible choice of protecting their shared and individual assets. Contact Hoe Lawyers if you need a Binding Financial Agreement family lawyer today