This article explores the meaning of binding financial agreement, its purposes and binding financial agreement cost.
Divorce rates across the world remain consistently high. It is normal for a relationship to breakdown due to various circumstances. Sometimes conflicting goals between two parties may result in the breakdown of a relationship. Whereas, sometimes basic incompatibility may cause a hindrance and prevent the relationship from progressing.
In any of these circumstances, it is essential to avoid disputes when going through a divorce or separation. There are two major reasons due to which disputes between separating couples usually occur. Firstly, child custody matters may cause disagreements. Secondly, property settlement and division of assets can get heated. In case of the latter, a binding financial agreement can prevent conflicts.
A binding financial agreement also known as a BFA or a prenup is an agreement which consists of information on how a couple’s assets, superannuation, property and liabilities are to be divided if the relationship comes to an end.
Couples can enter into BFAs either before their relationship, during their relationship or after their relationship. Importantly, according to the Family Law Act (1975) once a BFA has been entered into, the couple will no longer have rights/authority to determine matters related to division of assets or property settlement.
Purposes Of Binding Financial Agreement
Before we explore binding financial agreement cost, let’s understand what are the advantages of entering into a BFA.
- Having this agreement ensures that each party has some clarity on how assets will be divided in the event of a divorce or separation. Otherwise, there will be a lot of uncertainty around such matters which can result in greater conflicts.
- Where there are no BFAs in place, the parties have to attend courts to finalise property settlement matters. This takes a lot of time and efforts, and unnecessarily gives a lot of stress to both parties.
- Most importantly, a BFA eliminates the possibilities of conflicts/disputes arising around matters related to property settlement. Because the prenup clearly states how the division is to take place, both parties can rest assured that their interests will be protected.
A BFA can consist of information regarding the following:
- Property – includes assets and liabilities
- Joined and individual assets of the couple
- Spousal maintenance
- Insurance coverage
- If there are any gifts or family inheritances
Binding Financial Agreement Cost
There is no single answer to how much will a binding financial agreement cost because there are various factors which are taken into consideration. Each divorce or separation matter is unique with very different circumstances. Therefore, binding financial agreement cost will vary depending upon these unique circumstances.
Factors which influence binding financial agreement cost include:
- The number of assets and liabilities the couples have;
- How complex the property pool of the couple is;
- How long it took the solicitor to formulate the agreement to ensure that the division is fair and just.
In cases where the property pool and assets are more complex, legal practitioners will take more time to prepare an agreement which both parties find satisfactory. Therefore, the binding financial agreement cost for complex assets will be higher.
For getting a proper quote, ideally you should speak with a solicitor who can gauge your assets and provide you with a binding financial agreement cost.
Speaking with a family lawyer will help you have more certainty on the costs associated with these procedures. For straightforward BFAs, JB Solicitors also offers fixed-fee pricing. These costs can range somewhere between $2000 – $4000 – depending on various factors of your individual case.
However, as mentioned before, since each couple has unique circumstances, having a quick consultation with our lawyers can help you get a clearer understanding of your legal costs.
How To Reduce My Binding Financial Agreement Cost?
There are a few things that couples can follow to make sure that legal costs associated with preparing prenups can be slightly reduced. The reason that professionals take more time with complex assets is because they require additional documentation and paperwork.
Solicitors will need bank details, superannuation details, account balances, information on any mortgages, etc. You can gather this information beforehand to reduce the time it takes to prepare a prenup.
Solicitors will also need to have an idea about your current financial situation. Some important information to collect which reflect your financial situation include:
- Household expenses and living expenses
- Information about all assets such as bank accounts and real property
- Information on outstanding debts such as mortgaged, loans, credit card debts
- Business assets
- Tax returns
- If you have to pay for dependents such as children – their living expenses, their school fees.
It is important to note that you should leave your BFA-related matters to experts. In cases where a BFA is not executed or prepared properly, it can be set aside by the court. For instance, if all information regarding assets were not disclosed properly, or if the court finds that the prenup is not just and equitable, it can be set it aside.
This is why these matters should be left with expert family lawyers to handle.
JB Solicitors’ Family Law Advice
The process of preparing a BFA can be stressful because, after all, it is related to financial matters. Moreover, when making a prenup, you are forced to think about the possibility of your relationship coming to an end (in cases where prenups are being made before or during the relationship).
All of these matters cause a lot of anxiety and stress. In such cases, you will first need legal advice to help chalk out your future plans in relation to financial matters, and secondly you will need a good financial agreement in place.
This process can take anywhere between 2-5 weeks depending upon the complexity of your situation. But it is important to meet with trustworthy lawyers who you can rely on. Given how personal these matters are, you will require competent family lawyers.
Contact JB Solicitors today to get a better understanding of these matters.