When couples make plans for their financial future, one option is a binding financial agreement (BFA). This type of contract sets out how assets, debts, and finances would be handled if the relationship ends.
Many people are tempted by low-cost options when preparing these agreements. At first glance, choosing the cheapest path can seem like a smart way to save money.
But the question remains: is a bargain BFA worth the possible risks that come with it?
What Makes A Binding Financial Agreement Valid?
A binding financial agreement can be recognised under Australian family law if it follows strict rules. Both people need to meet certain conditions before the agreement can stand. These include:
- Entering the agreement willingly, without pressure or threats.
- Giving full details of assets, debts, and financial circumstances.
- Receiving legal advice from separate, independent lawyers.
- Signing the agreement with proper legal paperwork.
If any of these steps are missing, the agreement may not be upheld by a court. While a cheap BFA, such as one made with an online template, might look valid, it often falls short of these legal requirements.
The Hidden Risks Of Low-Cost Agreements
Opting for a cheap binding financial agreement may feel like a cost-saving choice, but it carries several risks that should not be overlooked.
Poorly Drafted Documents
Low-cost services often rely on basic templates. These generic forms may not fit a couple’s unique circumstances. Without careful drafting, important details could be left out.
If there are gaps or unclear language, the agreement might later be challenged in court.
Example: Imagine a couple who decided to use an online template. The document had no section about future inheritances.
Years later, one partner received a large inheritance, and the other claimed it should be shared. Since the agreement never addressed this, the matter ended up in court, causing stress and high legal fees.
Lack Of Legal Guidance
For a BFA to hold up, both partners need independent legal advice. Some budget services do not provide personalised legal support.
Without proper guidance, the risk of the agreement being considered invalid increases.
Example: A woman downloaded a do-it-yourself template, and she and her partner signed it at home. Neither spoke to a lawyer.
When they separated, the man argued that the agreement was invalid because they never received independent advice. The court agreed, and the entire document was thrown out.
Unfair Terms
If one person ends up with much more than the other, the terms may be seen as unbalanced. Courts can view such arrangements as unjust. Lawyers can help review financial details to create a more even outcome.
Example: A man with significant assets pushed his partner to sign a cheap BFA that heavily favoured him. Years later, the court found that she had been pressured and that the terms were one-sided.
The agreement was set aside, and the outcome was very different from what the man had planned.
Set Aside In Court
If a BFA is not prepared carefully, the court has the power to set it aside. This leaves both people without the protection they thought they had, and it may lead to drawn-out and costly disputes.
Example: A couple used a low-cost online service. Unfortunately, the service missed a required step in the signing process.
When the relationship broke down, the court found the paperwork incomplete and the agreement invalid. Both partners then had to start a lengthy property settlement case.
The DIY Option: Does It Really Save Money?
Some people consider writing their own binding financial agreement as a do-it-yourself project. While this might seem like a straightforward way to cut costs, it usually creates more problems than it solves.
Even if someone drafts their own agreement, both people are still required to receive independent legal advice. Without this step, the agreement will most likely be rejected in court.
Online templates may appear simple and quick, but they are often too general. Missing clauses, unclear wording, or mistakes in structure can make the agreement worthless.
What might look like savings at first can end up leading to greater expenses if the agreement is challenged.
Example: A couple decided to save money by creating their own agreement. They left out details about superannuation and how it would be split.
Years later, during their separation, one partner realised that the agreement said nothing about superannuation, which was one of their largest assets.
The lack of detail meant the agreement was not enough to protect them, and the court dismissed it.
If someone chooses the DIY route, it is still recommended to have the document reviewed by a lawyer to reduce the risk of it being thrown out.
Read also: Legal Guide to Binding Financial Agreements in Brisbane
Finding A Balanced Approach
It is understandable to want to control costs when preparing a binding financial agreement. However, the cheapest option is not always the safest.
The goal is to have a document that protects both partners in case the relationship ends, not one that creates more stress and confusion later.
There are ways to make the process more affordable without giving up security. Some people choose fixed-fee services or use lawyer-reviewed templates.
Others negotiate the terms themselves first, which can reduce legal fees during review. By focusing on both affordability and accuracy, couples can create an agreement that is more likely to stand up if tested.
Example: A couple decided to talk through the division of their assets together and came to a fair agreement. They then took their plan to a lawyer offering fixed fees.
The lawyer reviewed their draft, made small changes, and ensured it met the legal requirements. The couple ended up with a secure agreement that still kept their costs lower.
Why Careful Planning Matters
A binding financial agreement should not be rushed. Each couple’s financial situation is different, which means the agreement should reflect their personal needs. Taking shortcuts may seem appealing in the short term, but it can leave both people exposed to risks that could have been avoided.
Getting professional input is not just about ticking a box. It helps ensure the agreement is fair, well-structured, and less likely to be challenged. While this may mean spending more upfront, it can save stress and uncertainty down the track.
Example: A man and woman rushed into a cheap BFA before their wedding. They later realised that the agreement failed to cover a small business they started together.
When they separated, ownership of the business became a point of conflict. Because the BFA had not been updated or carefully reviewed, it provided no real protection.
Protecting Tomorrow Starts With Today
A cheap binding financial agreement may look like a good deal, but without proper care it can quickly turn into a problem.
Couples deserve peace of mind knowing their financial agreement is strong enough to provide the protection they expect.
By investing in careful planning and professional guidance, they can reduce risks and protect what matters most.
Why Leave Your Future To Chance?
Do you want to protect your future without spending more than you need to? At Ipswich Family Lawyers, we understand the importance of creating an agreement that is affordable yet legally sound.
Our team can review your situation and prepare a binding financial agreement that is tailored to your needs. We work with a focus on clarity and fairness so you feel more confident about the future.
Contact us today to discuss your options and see how our legal professionals can help you prepare an agreement that gives you greater peace of mind.
