Binding Financial Agreement

What is a Binding Financial Agreement?

• A Binding Financial Agreement is an agreement recording how the parties wish to divide their financials after separation. It can also include provisions for spousal maintenance

• Any couples can choose enter into a binding financial agreement even if they have never been married and do not plan to get married.

What is the benefit of entering a Binding Financial Agreement?

• A Binding Financial Agreement can be entered into at any time of the relationship. It can be entered into before a relationship starts, during the relationship or after separation.

• The family court does not need to be involved with the preparation of a Binding Financial Agreement.

• You feel free to write any clauses into the Agreement even if sometimes some clauses are unfair to one party.

• Both parties have the benefits of receiving independent legal advice before entering into a Binding Financial Agreement.

• When you wish to enter into a Binding Financial Agreement before getting married or before living together, your assets are secured by this Agreement from any further claims by your partner if one day separation happens unfortuantely.

Why you should be cautious when your lawyer encourages to enter into a Binding Financial Agreement ?

• A Binding Financial Agreement is notoriously known for being easy to be set aside by the court once challenged.

• There is a specific formality requirement regarding signing a Binding Financial Agreement. Failure to comply with the formality requirement could have the Agreement be set aside.

• If one party to the Agreement does not speak English as their first language or is blind etc., a lack of proper translation of the Agreement and a letter of advice for the Agreement may be a ground to set asie the Agreement.

• The judges in the family court unfortunately have not reached an unamious agreement as to when they may set aside the Agreement.

• Some judges hold views that a bad deal itself could be a ground to set aside the Agreement.

• Other judges hold views that a substantial change of circumstances in the parties’ life such as having a child may form a ground to set aside the Agreement.

• As a result, entering a Binding Financial Agreement is perhaps your last resort when you do not have other options.