Can you draft your own Binding Financial Agreement
Relationship breakdown and parents living apart is so very common these days that as a result, many people become concerned, especially at the start of a new relationship, to do something to try to make sure they don’t lose their house, other assets or a lot of money to their new partner if the relationship doesn’t work out. A lot of people would like to have some sort of “insurance” in place, to protect their assets from their partner, and their financial position generally, if they break up and go through a separation or divorce.
Unfortunately you cannot prepare a binding and legally enforceable Binding Financial Agreement without using lawyers. You don’t can’t do it yourself. If you try, it won’t be enforceable and will most likely be not worth the paper it is written on.
This is because:
- For a Binding Financial Agreement to be valid, binding and enforceable by a Court, you need 2 separate lawyers to provide each party with independent legal advice as well as issue and sign the necessary Certificate of having provided legal advice. That Certificate is also required to set out certain things within it and copies of the Certificates must be provided by each of the lawyers to both parties to the Binding Financial Agreement.
- A Binding Financial Agreement is a contract, and often, a quite complicated contract. To make sure the Binding Financial Agreement covers everything it needs to include to be binding, it is preferable that it be drafted by an appropriately experienced family lawyer after having taken full instructions from their client.
- Usually proper drafting of the Binding Financial Agreement together with appropriate legal advice, will make it very difficult for one of the parties to later successfully apply to the Court to have it set aside.
- After obtaining full instructions from their client, an experienced family lawyer can identify the issues which need to be covered in a Binding Financial Agreement and draft clauses to cover those situations and circumstances.
- A Binding Financial Agreement can be set aside if a party has not made full and adequate disclosure. Accordingly, it is usually recommended that the Binding Financial Agreement contain appropriate clauses to demonstrate that this has occurred and any waiver of additional disclosure.
Many people think they can draft up something themselves and especially think, that if they put that into some sort of formal document like a signed Contract or a Statutory Declaration signed by a Justice of the Peace, the document will be able to be relied upon and will be enough to work to protect their financial position and assets.
Unfortunately, people who do this, find out too late, that what they have drafted has no effect and that it has not given them any protection at all.
There are no short cuts when it comes to safeguarding your house, car, superannuation, military or veteran’s pension, other assets and finances.
Although the initial cost of a Binding Financial Agreement might be expensive, you should view and balance the cost of getting a lawyer drafted legally enforceable Binding Financial Agreement in place, against how much you could lose financially if your relationship fails and you separate. The cost of doing a proper Binding Financial Agreement the legally binding way, can be viewed as being like payment of an Insurance premium to give you some sort of insurance against what you might lose financially if you don’t have one in place, and to give you the certainty to knowing what will happen financially if you separate or divorce.
If your relationship breaks down, how much money or assets your partner may end up being entitled to and get from you, the cost of litigation which can take months or years, not to mention the stress and emotional toll of being involved in legal proceedings, is far more expensive and often, unaffordable. A Binding Financial Agreement can be a very worthwhile investment, not to mention give you peace of mind and get both parties onto the same page as to what might happen if you break up.
Whilst each party must have a lawyer involved to make a Binding Financial Agreement valid, there are essentially 2 ways you can get a Binding Financial Agreement, either:
- Use a lawyer to act for you in the entire matter including drafting the Binding Financial Agreement (a separate lawyer must also act for your partner to advise them); or
- You can use a Do It Yourself Kit to obtain a Binding Financial Agreement Template or Example to help you draft your own document, which you then then finalise with a Lawyer or take to a Lawyer for a consultation to obtain the necessary Certificate of Legal Advice.
Binding Financial Agreements: More you should know
We explain the basics of a Binding Financial Agreement in the information sheet What is a Binding Financial Agreement.
What should you put into a Binding Financial Agreement and what should you discuss with your partner before you enter into one. Find out in our information sheet What can you include in a Binding Financial Agreement.
You must be eligible to be able to lawfully enter into a Binding Financial Agreement. Read more in the information sheet Who can enter into a Binding Financial Agreement.
The timing of when you enter into a Binding Financial Agreement can be important. We explain in the information sheet When can you enter into a Binding Financial Agreement.
People often start living together, get engaged, have a baby or even get married and only then think about getting a Binding Financial Agreement. If this applies to you then you should read the information sheet Is it too late to enter into a Binding Financial Agreement.
There are various different types of Binding Financial Agreements. If you do not use the correct type of Binding Financial Agreement for your situation it may later be found to be invalid. We explain more in our information sheet Types of Binding Financial Agreements & What type of BFA do I need.
Will a Binding Financial Agreement actually work to protect your assets and income? Find out in the information sheet Are Binding Financial Agreements actually Binding.
If you have entered into a new relationship or are about to and you are thinking about the provision of your Will or what might happen after you die you should know the information in our information sheet How having a Binding Financial Agreement might help your Succession Planning.
Read the benefits of having a BFA in the information sheet What are the Advantages of a Binding Financial Agreement.
There may be a downside to having a BFA. This is discussed in the information sheet What are the Disadvantages of a Binding Financial Agreement.
Questions such as can your Binding Financial Agreement be changed or updated, what circumstances might have a court declare it invalid and set it aside are answered in the information sheet Can a Binding Financial Agreement be set aside, updated or terminated.
The information sheet How to tell your Partner you want a Binding Financial Agreement might also be helpful to you.
If you have separated or divorced and want to document your property settlement agreement in a legally binding and enforceable way, then the information sheet Should I use a Binding Financial Agreement or a Consent Order will contain important information for you.
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Other Pages in the Binding Financial Agreements Section
- What is a Binding Financial Agreement
- What are the different types of Binding Financial Agreement
- Who can enter into a Binding Financial Agreement
- When can you make a Binding Financial Agreement
- What can you put in a Binding Financial Agreement
- Is it too late to do a Binding Financial Agreement
- Are BFA’s actually Binding and Enforceable
- How having a Binding Financial Agreement might help your Succession Planning
- What are the Advantages of Binding Financial Agreements
- What are the Disadvantages of Binding Financial Agreements
- Can a Binding Financial Agreement be set aside, updated or terminated
- How to tell your Partner you want a Binding Financial Agreement
- Can I prepare a Binding Financial Agreement myself
- Should I use a Binding Financial Agreement or a Consent Order