What is Independent Legal Advice for a BFA?
If you've been asked to obtain independent legal advice before signing a Binding Financial Agreement (BFA), you may be wondering what that actually means.
Independent legal advice is a legal requirement for a Binding Financial Agreement to be legally binding in Australia. It ensures that each person understands the agreement they are signing and has the opportunity to receive advice from their own lawyer before making such an important decision.
In simple terms, independent legal advice is there to protect everyone involved.
Why is independent legal advice required?
A Binding Financial Agreement can have significant financial consequences.
By signing a BFA, you may be giving up rights that you would otherwise have under the Family Law Act 1975 (Cth) if your relationship were to end.
For this reason, the law requires each party to receive advice from their own independent lawyer before the agreement is signed.
This helps ensure that each person understands what they are agreeing to and has made an informed decision.
What does independent legal advice include?
While every matter is different, independent legal advice generally includes explaining:
the effect of the Binding Financial Agreement;
your legal rights and obligations;
the advantages of entering into the agreement;
the disadvantages of entering into the agreement;
how the agreement may affect you if your relationship ends;
whether there are any issues or risks you should consider before signing.
Your lawyer will also answer your questions and ensure you understand the agreement before you decide whether to proceed.
Can the lawyer change the agreement?
Yes.
After reviewing the agreement, your lawyer may identify provisions that should be amended or clarified.
If necessary, your lawyer can communicate with the other party's lawyer to negotiate changes before the agreement is signed.
Receiving independent legal advice does not mean you have to sign the agreement exactly as it was first presented to you.
Can both parties use the same lawyer?
No.
Each party must receive advice from their own independent lawyer.
This ensures that each person's interests are protected and avoids conflicts of interest.
A lawyer acting for one party cannot provide the independent legal advice required by the other party.
What happens after I receive legal advice?
After receiving advice, you can decide whether you wish to:
sign the agreement;
negotiate changes;
obtain further advice; or
decide not to proceed.
If you choose to sign the agreement, your lawyer will generally provide the required certificate confirming that independent legal advice has been provided.
Do I have to follow my lawyer's advice?
No.
Your lawyer's role is to explain your legal position, the effect of the agreement, and its advantages and disadvantages.
The decision whether to sign the agreement remains yours.
Having independent legal advice simply ensures that your decision is informed and that you understand the legal consequences before proceeding.
Independent legal advice helps protect your future
Obtaining independent legal advice is much more than a legal formality. It is an opportunity to understand your rights, ask questions and ensure you are comfortable with the agreement before signing.
At Gaia Law, we provide fixed-fee independent legal advice for Binding Financial Agreements. We take the time to explain your agreement in plain English, answer your questions and ensure you understand your options before making your decision.
Disclaimer: This article provides general information only and is not legal advice. Every Binding Financial Agreement is different, and the advice you require will depend on your individual circumstances and the terms of the agreement. You should obtain independent legal advice tailored to your situation before signing any Binding Financial Agreement.
If you have been provided with a Binding Financial Agreement and require independent legal advice, contact Gaia Law to arrange a consultation.
