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5 Reasons Why You Should Not Go For A Binding Financial Agreement

  • Home Blog 5 Reasons Why You Should Not Go For A Binding Financial Agreement
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05 February 2020 | Binding Financial Agreement

Across cultures, the pace of divorce rates has been steadily increasing. Consequently, the demand for divorce lawyers has risen considerably, not to mention the intricate technicalities involved. If you are looking for one in Sydney, Matthew Buckley is one of the most reputed property settlement lawyers in Sydney, with an uncompromising grip on a wide scope of family issues.

As mentioned at the outset, the legal technicalities might at times be baffling, for instance, whether or not you should go for a BFA, among other things. However, a binding financial agreement in NSW has its own repercussions. The following are the 5 reasons why you should not go for it.

1. Non-Intervention by the Court

In a BFA the Court is virtually non-existent. As it is, the Court is not vested with any supervisory or minimum regulatory role in the case of a formal BFA. The BFAs are not officially registered with the Court; thereby making them immune to the latter’s intervention of any sort.  If the terms of the BFA are challenged by a concerned party the Court may only then intervene.

2. Third Parties not Liable to the Agreement

According to the norm, no third party shall be bound to the respective terms and conditions of the Binding Agreement. Consequently, a third party is exempt from any sort of binding scrutiny. This is an obvious demerit of the BFA. However, as an exception, in case of the superannuation splitting arrangement, the norm may be reversed.

3. Increased Costs

Generally speaking, a formal Agreement may incur considerably greater expenses. As a rule, the terms of the agreement need to be drafted very conscientiously. Consequently, the sheer complexity of the subject inevitably results in increased costs. Besides, additional recommendations or suggestions from the concerned party keep pouring, thereby taking too long.

4. Complications in Legal Advice

As per the stated norm, each party is required to obtain legal advice so far as the terms and conditions of the agreement are concerned. The aspect of legal advice might often translate into bitter legal disputes regarding the terms of the agreement. Besides, the possibility of such a rift is higher in case a party is effectively warned against signing the document. These obviously affect the dynamics of the enterprise at large.

Also Read5 Reasons For Hiring A Property Settlement Lawyer after Divorce

5. Uncertainty in the Law

So far as the BFA is concerned there is tremendous complexity surrounding the law. What makes everything particularly cumbersome is the fact that you appear not aware of the potential action by the Court to set aside the agreement. As a result, you are virtually left to dangle at a cliff’s edge. The abstract implications of the law infuse a considerable level of uncertainty, making it all very untenable.

It is important to keep in mind that while the BFA has some obvious demerits its use may be encouraged only in certain cases such as documenting your property settlement agreements or as an asset protection measure. However, in other cases, it is important to proceed in accordance with the norms of the Family Law Act.

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