A binding financial agreement, also known as a prenuptial agreement or a financial settlement agreement, is a legal document that outlines how couples will divide their assets in the event of a separation or divorce. It is a wise decision for any couple to consider signing a binding financial agreement before entering into a marriage or de facto relationship.
A sample of a binding financial agreement typically includes several important sections:
1. Introduction: This section will include the date of the agreement, the names of both parties, and a brief statement outlining the purpose of the agreement.
2. Assets and liabilities: This section will outline all of the assets and liabilities that each party brings into the relationship. This includes bank accounts, property, investments, and any debts.
3. Division of assets: This section will outline how the assets will be divided in the event of a separation or divorce. It will include details about who will retain ownership of certain assets, such as property and vehicles.
4. Spousal maintenance: This section will outline whether or not either party will receive spousal maintenance in the event of a separation or divorce, and if so, how much and for how long.
5. Child support: If the couple has children, this section will outline how child support will be calculated and paid.
6. Termination: This section will outline the circumstances under which the agreement can be terminated, and how notice must be given.
It is important to note that a binding financial agreement must be signed and witnessed by both parties, and each party must receive independent legal advice before signing. It is also crucial that the agreement is regularly reviewed and updated when major life changes occur, such as the birth of a child or the purchase of a new property.
In conclusion, a binding financial agreement can provide peace of mind for both parties entering into a relationship by clearly outlining how their assets will be divided in the event of a separation or divorce. While it may not be the most romantic conversation to have, it is a necessary step in protecting your financial future. With a clear understanding of the contents of a binding financial agreement, you can work with your partner to create a document that meets both of your needs and provides a solid foundation for your relationship.