Our customers often ask us “why do I need legal advice” for my financial agreement to become legally binding?. Ian explains why it’s necessary in this video.
Transcript
Hi, Ian here from RP Emery.
I’m often asked by my customers when entering into a binding financial agreement, why do I need to get legal advice? The argument generally goes along the line of: Well, we already know what we want to do. We understand what we’re putting together. Why do we need legal advice?
The main reason is that it’s simply a requirement of the Family Law Act and unless you get legal advice, you’re agreement won’t have any binding force. The Family Law Act states that before entering into a financial agreement, you must receive legal advice independent of the other party. So, that means you’ve both got to see a separate solicitor because one solicitor can’t provide adequate advice for two people. He or she would have a conflict of interest.
The second reason is that it’s a safety measure. So, neither party after receiving the legal advice and signing the agreement could then argue that, “Hey, I didn’t know what I was signing. I didn’t understand it. I didn’t understand what my rights are.” And having said that, that’s part of the solicitor’s job to make sure that each party understands what their rights are under the law and what rights they’re giving up.
For instance, when you enter into a financial agreement, you give up the right to have a court make a determination about matters that are already dealt with in the agreement. Your lawyer has to explain the advantages and disadvantages of entering into the agreement and they’ll do that with a full understanding of the financial situation of each of the parties. They will also want to make sure that there’s no inference of pressure being brought to bear from either the other party or from a third party; somebody outside of the arrangement who’s putting pressure on someone to sign the agreement when they don’t really want to.
So, that’s basically it. If you want your agreement to have binding force and stand up to scrutiny if it were ever to come before a court then you must receive legal advice. And, the solicitors providing that advice must provide their certification that that advice has been given.