Once you have a binding agreement it is easy to assume that everything is locked down and the terms of the transaction can’t be subsequently altered. However, this is not always the case.
A binding agreement is traditionally seen as an agreement made between two parties where one party can take the other to court if the second party breaks the terms of the agreement. When the agreement is financial this will cover the distribution of assets should a divorce occur. In many countries, it is referred to as a prenuptial agreement but Australia prefers to call it a financial agreement.
These agreements don’t just cover the distribution of assets taking into account what each party brought into the marriage. They also allow you to create financial support packages for partners and children if you do split up.
If you’re considering getting married or even ready to get divorced, it’s important to speak to a specialist in family law Sydney. They can help you to understand the implications of any existing agreement; how likely it is to actually be binding, and create a satisfactory settlement.
It’s important to note that this is generally significantly cheaper than going through the courts as well as faster and more likely to help you maintain a reasonable relationship with your ex-partner.
Getting Legal Advice
One of the biggest reasons why a binding agreement fails to be binding is when one or both parties have failed to get the appropriate advice. You may feel that you know what you need and additional advice is simply a costly extra. But, it is legally necessary for both parties to obtain independent legal advice before signing any binding agreement. Naturally, both partners also need to sign the agreement.
If either of these conditions is not met then the binding agreement will not be legally enforceable.
Legal advice is important as a binding financial agreement can be beneficial for both parties. Providing it is approached with an open mind and all the facts you can make an informed decision and avoid the stress of trying to decide if a binding financial agreement is a good idea or not.
Getting A Binding Agreement Overturned
You can overturn any binding financial agreement by creating a new one. In essence, the creation of a new one supersedes the existing agreement but make sure it is best to specify this in the new agreement.
It is also possible to simply terminate the binding financial agreement. To do this, both parties will have to sign an agreement to terminate the financial agreement. Again, it is important to take legal advice and to have witnesses to your signature.
Overturned By the Court
There are also times when the courts will overturn a binding financial agreement. This includes when fraud can be shown to have occurred. In this instance, it is usually the non-disclosure of something that is materially important to the original agreement.
This includes the intention by one party to deliberately defraud the other party by entering an agreement dishonestly and hoping to financially gain from it.
Naturally, if either party can show they signed under duress or without proper legal advice then the binding agreement would be invalid.
It is also worth noting that the binding agreement can be revoked if your situation has fundamentally changed. For example, you now have a child. The binding agreement may not make allowance for this and will need to be redrawn or simply canceled.
Not Properly Drawn Up
As you have discovered, you need independent legal advice and witnesses to your signatures. This is an important first step in assuring the agreement is valid and can be upheld later when needed.
This means it is inevitable that an agreement drawn up by an unqualified lawyer or by the two parties involved, will be null and void, effectively wasting your time.
If you’re choosing a binding financial agreement then make sure it is done properly, otherwise, it’s not worth the paper it’s written on.
Reasons To Get A Binding Financial Agreement
You may feel that a binding financial agreement is not romantic or suggests that at least one party is not interested in dedicating themselves to the other for life. This isn’t generally the case. A binding financial agreement simply ensures everyone knows the financial position before the relationship becomes official and what it would be if the relationship ends. This helps to stop people from getting married just for the money.
Binding financial agreements are generally undertaken when one partner has significantly more wealth than the other, it’s likely that one of you will get a large inheritance in the future, or you operate a business that you need to keep financially separate for the sake of the employees.