A father of two from Sydney has recently been awarded $800,000 in damages after he sued his former family lawyers for negligence, claiming a “pre-nup” they created was useless in shielding his assets from the subsequent divorce.
So how do you make sure that your ‘pre-nup’ (or binding financial agreement, also known as a “BFA”) is worth the paper it’s written on?
- Make sure you go to a specialist family lawyer who is familiar with drafting BFAs;
- The law can change and catch lawyers unawares, if they are using an old precedent. Also, most specialist family lawyers regularly attend seminars, conferences and workshops in order to keep up to date with changes in how judges interpret the law. This current knowledge will help them to draft a water-tight BFA;
- Make sure the BFA is not signed in a rush, or under pressure. The circumstances around the signing of the BFA can lead to the BFA being set aside in future.
- Make sure your lawyer has provided you with a written advice about the pros and cons of entering into the BFA. BFA’s should not be entered into with haste, or with a view to keeping your legal fees to an absolute minimum. Trying to save money when entering into the BFA can cost you dearly if it’s set aside. For some clients, it may actually be in their interests not to enter into a BFA, but rather to wait and allow the Family Court and the Family Law Act to divide their assets appropriately. A specialist law firm such as Armstrong Legal can advise you about the risks of entering into a BFA including the risk that you are cutting off future entitlements.
- Remember that although the particular husband in our case above successfully sued his lawyers in the civil courts, that path should only be a very last resort. There will be enormous costs of starting litigation to sue your lawyers, and you may not achieve the result you are after, even after spending even more money on the second litigation.
To assist you in working out whether a BFA is right for you, or if you have questions on the validity of an already signing BFA, see one of our specialist lawyers for advice on your situation.