Binding financial agreements (BFAs) set out how assets are to be allocated in the event that a relationship breaks down. It can be made before (prenup), during or after a relationship. A Binding Financial Agreement sets out how all the assets, financial resources and liabilities, of both parties as individuals, will be divided should the relationship break down.
Legal Advice must be obtained
Common to all types of binding financial agreements is a statutory requirement that each party has obtained legal advice independently of the other party to the agreement, and had the implications of signing the Binding Financial Agreement fully explained to them. Without a solicitors certifiate for each spouse the agreement is invalid.
Advantages of Binding Financial Agreements
- A Binding Financial Agreement (BFA) is created at a time when you are not angry or upset and so there is maximum goodwill from each party to the other.
- Having a BFA in place ensures each party is clear on how the assets will be divided up in the event that a separation occurs.
- Having a BFA in place should eliminate the need for the spouses to resolve the allocation of assets in the court system.
- BFA’s can be very reassuring if you have more or fewer assets than your partner or if you have previously been through the breakdown of a relationship.
- A BFA protects ownership and retention of interests in businesses that might otherwise have to be at least valued or at worst sold on any separation.
You should consider a BFA as a safety net, or a form of insurance which you hope you will never need.
Our Family Law Team have extensive expertise in the area of advice and the drafting of sound Binding Financial Agreements in both prenuptial (pre-nup) and post relationship (post-nup) scenarios.
Contact a member of our Family Law Team today and benefit from our experience in this complex area.