What Are The Pros and Cons of Financial Agreements?

Advantages of entering into a Binding Financial Agreement

There are many benefits for entering into a BFA. Firstly, a BFA can be a type of ‘relationship insurance’.

 

It would serve as a safety net, regardless of whether it ends up being used or not. Secondly, it can empower a couple to decide in advance what they would quantify as a fair distribution of financial assets, resources and liabilities. It can also mean that laying out provisions whilst the relationship is happy together, if entering into a BFA prior to separation, means the agreement is likely to reflect what both parties would accept is reasonable.

 

A BFA can also enable the more financially wealthy partner that the other party is not in the relationship for materialistic reasons. Additionally, ground rules are able to be established regarding who will pay for what bills, how property is divided and where income will go. If either party has already been a separation or divorce, a BFA can also provide reassurance.

 

Finally, a BFA can be a more cost-effective and simple solution than other options post-separation. This could include the higher costs of trying to negotiate a settlement or having the Court decide the division of assets and financial resources.

Disadvantages of entering into a binding financial agreement

There can be some risks to entering into a BFA. This can include that it is sometimes difficult to bring up the topic of entering into such an Agreement with your partner. Your partner may fail to see any benefit for themselves. Secondly, BFA’s do not allow for Third Parties to enter the Agreement. The actual agreement may also end up being unfair for one party, if not all possible scenarios are accounted for. It is notable that the Court will not set aside a BFA simply because it is unfair to one party.

 

The legal fees in drafting the Agreement and the requirement for both parties to retain separate Independent Legal Advice can also be costly. There is also no scrutinizing body to consider the terms of BFA, nor is there a registration system to note when a BFA has been entered into. Finally, the law surrounding a BFA can be complicated and there are not many cases as to when a BFA has been set aside. This can cause a degree of uncertainty.

Divorce
How To Get A Divorce?
Application for Divorce
How much does a divorce cost?
How Long Will It Take For My Divorce To Be Finalised?
Do I Have To Attend Court To Get A Divorce?
What is a Divorce Hearing?
How to get a divorce in Australia if married overseas?
Divorce Counselling
Should I Change my Will After a Divorce?
Child Custody
What are the best interests of the child?
Where Will My Children Live?
What is equal shared parental responsibility in Australia?
Sole Parental Responsibility
Visitation Rights
Changing A Child Custody Agreement
Child Relocation After Divorce
How To Prevent My Child Going Overseas?
What is Supervised Contact?
Child Passport After Divorce
Property Settlement
How Much Will I get?
Will I Receive 50% of Everything?
Coming To An Agreement Outside Of Court
Do I Pay Stamp Duty To Transfer My Property After A Divorce?
Financial Agreements
What is a Prenup?
What Can I Put In A Prenup?
Is It Too Late For A Prenup?
What Are The Pros and Cons of Financial Agreements?
What Financial Agreements Are There?
How Do I Make Sure My Agreement Is Binding?
How Can I Get A Prenup Set Aside?
Consent Orders
Why do I need Family Court Consent Orders?
Application for Consent Orders
Breach of Consent Orders
Child Support
What is Child Support?
Apply for Child Support
Child Support Calculation
Changing Child Support
Family Mediation
5 Tips to Help Prepare for Family Mediation
What is a s60i Certificate?
Going to Court
Starting An Application
Filing A Response
Separation
Can You Be Separated And Live In The Same House?
Domestic Violence
ADVO – Apprehended Domestic Violence Order
Remove My ADVO
What Is Child Abuse?
Father's Rights After Separation
Formalise Your Agreement
Tip's For Fathers
De Facto Relationships
Definition of De Facto Relationship
Rights in a de facto relationship
Contact us for your Free initial consultation. Available at our Sydney CBD office or on the telephone.