A Binding Financial Agreement BFA is an agreement between two or more people, usually couples, which sets out how their financial matters should be handled in the event of a relationship breakdown. It is legally binding and can apply to both married and de facto couples. BFAs are also known as prenuptial agreements, post-nuptial agreements, or marriage contracts.
Purpose of a BFA
The purpose of a BFA is to protect the financial interests of each party in case the relationship ends. It sets out who owns what assets and liabilities before entering into the agreement, as well as how these will be divided if the couple splits up. A BFA can also include provisions for spousal maintenance payments and/or child support payments if needed.
Content of a BFA
In order for it to be legally binding, all BFAs must include certain basic elements such as:
• The full names and addresses of all parties involved;
• A detailed description of each party’s assets;
• An outline of any debts that either party may have;
• Any terms regarding spousal maintenance or child support payments;
• A statement confirming that both parties have received independent legal advice prior to signing the document;
• The date when both parties signed the document.
Advantages & Disadvantages
One advantage to having a BFA in place is that it helps protect both partners’ financial interests if they decide to part ways later on down the line. This means that there won’t be any surprises or arguments over who gets what when they split up – everything will already have been agreed upon beforehand so there won’t need to be any disputes afterwards. It also allows you to make decisions about your own finances without having to worry about what could happen in case your relationship doesn’t last forever.
However, there are some drawbacks associated with having a BFA too – namely that it can add an extra layer of stress onto an already difficult situation: trying to agree on how your finances should be divided during such an emotionally charged time can cause further tension between you and your partner at an already challenging moment for both parties involved. Additionally, because BFAs are legally enforceable documents they need careful consideration so it’s important not rush into making one without consulting experts first – otherwise you risk ending up with something that isn’t actually suitable for your particular circumstances.
Conclusion
In conclusion then, while Binding Financial Agreements may offer some protection from unexpected costs following separation from one’s partner they do come with risks attached too so should only ever be entered into after careful consideration has been given by all involved parties first.
