Drafting Binding Financial Agreements that Withstand the Test of Time
In a paper presented to the Television Education Network, Accredited Family Law Specialist and Page Provan Director Stephen Page discussed in detail everything you need to know about drafting binding financial agreements.
The key messages that I give about drafting financial agreements are these:
- Make sure that it is a binding contract.
- Don’t engage in shortcuts. Slow and steady, with a meticulous approach, wins this race.
- Take scrupulous care as to compliance with the provisions of the Family Law Act 1975 (Cth).
- When it is your turn to give advice, do so. Our role as lawyers is not merely to witness a signature, but to positively give advice. It sounds boring to say it again- but do your job properly and don’t take shortcuts.
- Make sure your client understands the advice- and tells you so: and document that, preferably with your client having signed an appropriate acknowledgment. Again, don’t take shortcuts.
- Scrupulously document everything you do so, there is no doubt as to the advice that you have given your client, that your client understands the advice, or as to any representations made to the other side. For the sake of clarity, I’ll say it again- don’t take shortcuts.
- If your client is from a CALD background, or has some other disadvantage, have an interpreter (and if necessary have the document translated) or other necessary step that might address that disadvantage.
- Ensure that the deal is fair – and therefore defensible. If it fails the sniff test, then the greater the prospects that the Court will be seeking to find that the agreement is not binding or that it ought to be set aside.
- If your client is being done over badly, make sure you tell your client candidly of this (including documenting it with written advice not to sign, and an acknowledgment by the client) and consider whether it is appropriate for you to act, or whether you should withdraw.
- Ensure that the process leading up to the execution of the financial agreement is a fair one, with sufficient time for reflection. Slow and steady wins the race- and again, don’t take shortcuts.
- Assume that there is greater risk with a prenup- and act accordingly to reduce that risk
- Particularly for a prenup or an agreement which has a long life (such as for the payment of periodic maintenance) don’t follow the usual seven year archive rule, archive the documents forever.
- Ensure that you’re signed up to a professional standards scheme, to limit liability.
- Ensure that you have adequate insurance.
To access the rest of the presentation, download the paper here.
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