If you tuned into the Insight program on Binding Financial Agreements that aired last week you might be left with the same lingering questions and concerns that I have.
As a family law solicitor who drafts financial agreements every day I was hoping to see some sensible debate and useful information being provided to the general public. Unfortunately that is not at all what I saw. What I did see was a number of lawyers attempting to big note themselves, even those lawyers who no longer draft these agreements, and a general feel that these agreements need to be an aggressive process that is lawyer driven.
Let me dispel some of these falsehoods....
- On lawyer commented "if you wanted an agreement that was fair you wouldn't be paying me $800 an hour to draft something".
This comment certainly had my eyebrows raised and not just at the hourly rate mentioned. The truth about financial agreements is that they should be fair. They should be a document that both parties in the relationship can live with and it should represent, at least in some way what a Court might decide in the matter was litigated.
One of the first questions I ask clients when they come to see me about a financial agreement is what have you two discussed, or what have you thought about the division of assets being. Parties should be empowered to make these decisions and have legal advice to guide them towards something that is not just fair to them, in their individual circumstances but also something that would be in the range of resolutions a Court would order.
- "I have included a list of my Tupperware, I put everything in it"
Such a staggering comment. A financial agreement can be either as simple or complex as you would like. Generally I do not recommend including lists of relatively inexpensive household items unless they hold some significant sentimental value to the parties. There are various reasons for this the two big ones being; listing everything overly complicates an already complex legal agreement which is more confusing for parties and opens up the document to challenge, and two because adding such things increases legal costs completely unnecessarily.
Generally financial agreements can include what you want, however if you have a lawyer suggesting you should include things as insignificant as Tupperware you might want to have a think about the two points I have raised above.
- "He better sign the agreement, if he doesn't sign the agreement the relationship is over"
This comment is troubling on so many levels. Firstly, if pressure such as this is exerted on a partner to sign an agreement the Court is very likely going to find that the person was placed under what is known as duress (which is significant pressure) and this could result in the agreement being set aside.
Making comments such as the one stated above are not advised, at all or in any circumstances. I certainly would not recommend you make such a comment on national television!
- "If I have to choose between my wealth and my relationship I choose my wealth"
Hopefully you wouldn't have to make that choice. In the many years that I have been drafting financial agreements I am yet to come across a matter where a relationship has broken down because one party asked for a financial agreement. I suppose if a relationship did break down you might start asking questions about the strength of the relationship. A good quality family lawyer will help you with how to broach the topic of a financial agreement with a spouse and talk through with you some of the key discussion points.
The process of creating a financial agreement should be something that both spouses engage in rather then it being a demand from one to another.
Financial agreements are complex, and they need to be prepared carefully there is no doubt. Such a document is not something that can be prepared overnight that is certain. But as complex as they are financial agreements should still be reflective of the intentions of the parties and keep the goals of the client in mind.
The most important guidance that I can offer is to say that there are lawyers out there who know what they are doing in relation to financial agreements and can handle drafting one of these complex documents with professionalism and with a view to actually providing assistance to client's.
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