Post-Separation Binding Financial Agreement Pros and Cons

If your spouse and you have concluded to end your relationship, resolving any property or financial issues as quickly as possible and amicably as possible is critical. To get to trial, a typical lawsuit might run up to $70,000.00 in legal fees for each party involved.

 

When possible, resolving family law disputes early and without the need for the Court’s intervention is usually beneficial to both parties. Some adjustments and compromises are required from both parties for this to work.

 

A Bidingn Financial Agreement can be utilized to formalize a deal if you and your partner can agree on the terms. However, what is a binding financial agreement, and how does it differ from a standard contract?

 

What Is a Binding Financial Agreement?

Marriage and de facto relationships in Western Australia can have legally binding property agreements if the following conditions are met:

  • They are about to get into a marriage or de facto relationship
  • They are in a marriage or de facto relationship
  • They have separated

It is possible to avoid court intervention in a pre-existing agreement by signing a properly designed and implemented Binding Financial Agreement with your partner. This gives you peace of mind if your partnership ends in divorce.

 

Exactly What Constitutes A Binding Financial Agreement As “Binding”?

If they’ve been set up correctly, they’re binding. The Family Court has the power to overturn a family law property settlement and impose its terms if it is not properly drafted and does not adhere to the standards of the law.

To make a financial agreement legally binding, it must be drawn out by a lawyer and signed by both parties.

Every two years, or after a big event like the birth of a child, receiving an inheritance, or receiving another windfall not foreseen by the agreement, it is advised that a legally enforceable financial agreement be reviewed.

 

Pros:

  • Certainty

The certainty of property and asset division in the event of a breakup serves as the most important financial benefit. When a marriage or partnership ends, many couples mistakenly believe they will be able to share their assets and property peacefully.

While this may apply to some, the reality is that many people cannot come to reasonable and fair agreements because of the high stress and emotional turmoil they are experiencing.

In addition, your spouse will be aware of the terms of the marriage after the divorce and the assets they will receive due to it.

 

  • Costs

Court, application, and legal fees can add to a large amount of money. Because of this, if this case were to go to court, the costs might easily reach the six-figure area, depending on how willing each party is to compromise.

Because of this, one of the primary benefits of a legally enforceable financial agreement is its capacity to lessen the financial burden of family court proceedings.

 

  • Efficiency

The mere efficiency of splitting property and assets in a trial setting is a binding economic benefit that most people overlook. Due to the high cases in Australia’s courts, acquiring a hearing date can take months. When ex-partners can’t come to an agreement, and the legal proceedings drag on even longer, this problem gets much worse. To avoid all of this litigation and emotional upheaval, it’s important to have a legally binding financial arrangement in place.

 

  • Tax Benefits

As part of a Binding Financial Agreement to resolve your family law issue, both parties will be excluded from paying Stamp Duty on any property transfer required by the agreement’s terms.

 

Cons:

  • No Regulation

The substance of a Binding Financial Agreement is not evaluated or scrutinized by any regulatory entity. The substance of a Binding Financial Agreement is not registered officially.

When you sign a binding financial agreement, you must get legal counsel from a lawyer. This is also why you should ensure that the lawyer you hire to create the advice thoroughly evaluates and assesses the benefits and drawbacks of that specific arrangement.

A court does not automatically void Binding Financial Agreements for being unjust.

 

  • Solicitors are a must

A solicitor’s opinion is required if you and your ex-partner or ex-spouse have reached an agreement. To ensure the validity of a binding financial arrangement, the involvement of a solicitor in advising and giving a certificate is critical.

A consent order application with the court may be an option if you and your ex-partner or husband do not want to engage a lawyer to handle your divorce.