Advantages of having a Binding Financial Agreement

How could having a Binding Financial Agreement benefit you 

There are many benefits and advantages to entering into a Binding Financial Agreement with your partner, no matter what stage of your relationship you decide to do so.

We’ve compiled a list of some of the reasons you might find it beneficial or advantageous to make a Binding Financial Agreement with your partner.

Some of the advantages and benefits to you having a Binding Financial Agreement with your spouse include:

 

• Making your own rules about the financial circumstances of your relationship when you are happy together, means that the agreement is more likely to reflect something both parties consider reasonable.

• A Binding Financial Agreement can provide reassurance if you have already been through a separation or divorce.

• It is usually easier, less stressful and more cost effective to make decisions about financial matters when people are happy within the relationship, rather than after separation.

• A Binding Financial Agreement can be used to protect or quarantine, some or all assets from the other party, especially initial contributions made at the commencement of the relationship, future inheritances etc.

• Having a Binding Financial Agreement in place can reassure the more financially wealthy partner, that their spouse is in the relationship for the “right” reasons and not for materialistic reasons.

• Having a Binding Financial Agreement is like having a form of insurance. It can be a safety net you know you have if need it, despite hoping you never need to use it.

• A Binding Financial Agreement specifies the ground rules about how you are going to acquire and own property, who will pay what bills, where weekly wages and income will go etc.

• A Binding Financial Agreement empowers a couple to decide in advance, what would be a fair distribution of their assets if their relationship fails.

• Getting a Binding Financial Agreement in place is usually always a more cost effective solution, than after separation, either trying to negotiate a settlement, or going to court about the division of assets, financial resources and maintenance.

• The property settlement and division process after separation can be a lot more simplified if the parties have a Binding Financial Agreement;

• Having a Binding Financial Agreement in place often gives each party some peace of mind and clarity as to what will occur with their finances and assets if the relationship fails and they separate.

• Having a Binding Financial Agreement will often provide some level of security and peace of mind to people who already have children or assets when they are entering (or have already entered) a new relationship.

• There is usually a lot of disharmony between former spouses following separation. Having a Binding Financial Agreement in place can help avoids a lot more potentially divisive issues that could occur after separation.

• A Binding Financial Agreement being in place can settle any suspicions or niggling doubts someone may have about financial issues.

• Binding Financial Agreement’s can be used as an estate planning tool to ensure property passes as is intended.

• A Binding Financial Agreement can provide stamp duty and Capital Gains Tax relief for separated couples, subject to some exceptions.

Binding Financial Agreements: More you should know

You should also be aware of possible drawbacks of having a Binding Financial Agreement. We explore this in the information sheet What are the Disadvantages of a Binding Financial Agreement.

There are some basics you should know about a Binding Financial Agreement which are set out in the information sheet What is a Binding Financial Agreement.

What can you include in a Binding Financial Agreement. What should you talk with your partner about before you enter into an Agreement. Read more in the information sheet What should you include in a Binding Financial Agreement.

Do you want to draft your own Binding Financial Agreement and save some legal fees. We explain whether you can in the information sheet Can I prepare a Binding Financial Agreement myself.

You must be legally eligible to enter into a Binding Financial Agreement. Find out more in our information sheet Who can enter into a Binding Financial Agreement.

The issues of timing to do a Binding Financial Agreement is detailed in the information sheet When can you enter into a Binding Financial Agreement.

Have you already started living together, got engaged, had a baby with your partner or even already got married and only after one of those events started thinking about getting a Binding Financial Agreement? If so read our information sheet Is it too late to enter into a Binding Financial Agreement.

What are the different types of Binding Financial Agreements? You need to use the correct type of Binding Financial Agreement for your situation or it may later be set aside. Read more in our information sheet Types of Binding Financial Agreements & What type of BFA do I need.

Will your Binding Financial Agreement actually protect your assets and future income? Find out the answer in our information sheet Are Binding Financial Agreements actually Binding.

If you have already started a new relationship or are about to do so and have thought about provisions of your Will or what might happen after you die, you should read our information sheet How having a Binding Financial Agreement might help your Succession Planning.

Can your Binding Financial Agreement be updated or changed after you have made it? When might have a court declare a Binding Financial Agreement invalid. Read the answers in the information sheet Can a Binding Financial Agreement be set aside, updated or terminated.

See the information sheet How to tell your Partner you want a Binding Financial Agreement if you have concerns about broaching the subject with your partner.

Have you separated or divorced and need to document your property settlement agreement in a legally binding and enforceable way? Our information sheet Should I use a Binding Financial Agreement or a Consent Order will help explain the options.

 

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