A financial agreement, or a “binding financial agreement”, is an agreement that details how all the property and assets are divided in the event of the dissolution of a marriage, separation or divorce. A financial agreement is put into place in order to mitigate any future confusion with respect to division of property, in the event that a couple chooses to end its marriage. Additionally, a binding financial agreement can help one to protect future income, and can also guarantee that the parties and their children are sufficiently taken care of following the end of a marriage.
Types of Financial Agreements
There are several types of financial agreements. To understand which type of financial agreement is right for a couple, the couple’s relationship status is a factor – depending upon whether the couple is living together, married, separated, divorced or of another status all impacts the type of financial agreement that should be made. Types of binding financial agreements include: cohabitation agreements, prenuptial agreements, postnuptial agreements, separation agreements or divorce agreements. Additionally, financial agreements may be made between opposite sex or same sex couples.
What to Include in a Financial Agreement
As with most legal documents, the contents of a financial agreement vary from case to case and from country to country. The following is a general list of what may be included in a financial agreement (subject to geographic location and case):
- How money will be divided – whether weekly, monthly or other
- To whom already owned property and assets belong
- To whom assets acquired in the future belong
- Who pays rent or mortgage (one party or both)
- Should the marriage end, what type of alimony will be paid and to whom
- Lists of assets and liabilities that each party has at the start of the relationship.
Again, the above lists examples of items that may be included in financial agreements. However this list is just a snapshot and changes depending on the type of financial agreement, circumstance and country of residence.