It is tempting to call binding financial agreements “pre-nups”, but this ignores most of the impression. Binding financial agreements can occur at any point before, during and after a marriage ends. Essentially, these explain the whole process of what happens upon divorce such as how assets are to be divided and whether, and how much, maintenance will be offered. Why Should I Want a Binding Financial Agreement? That’s a good question. In the end, you two love each other and it’s “till death do us part.” Obtaining a financial agreement may thus be viewed as tempting fate. And, unless you’ve just landed the prime role in the latest blockbuster movie or won the lottery, you may believe it isn’t worth the trouble.

But binding financial agreements can cover any kind of asset, contingency or consequence you can think of. They can outline preservation, splitting up of assets (whether obtained before or throughout the marriage), how the children (if any) are to be cared for. As a result, these are great for protecting any asset that has expressive value for you, whether or not it is also monetarily valuable. They can as a result be used to safeguard your grandmother’s priceless china collection that she bequeathed you.

Binding financial agreements therefore provide comparable assurance in the unfortunate event that your relationship does break down. Without having a financial agreement, if you do land in court, your choice will be based on what the judge deems to be proper, just and fair in the situations, not how you make a decision. The consequences of this process are unknown until a decision is made, and even then it may be appealed, resulting in a drawn out process. Alternatively, a binding financial agreement provides certainty in advance. Further, since it is an agreement, the parties do not have to receive the same shares of the assets, although may certainly choose to do so.

Divorces and separations are agonizing enough already. Emotions are typically high. Adding uncertainty and legal battles to the mix does not suggest a good outcome for either person. Thus, a financial agreement should resolve a number of these problems.

As the agreement is binding, you don’t have to appear before a court. In reality, they hinder either party from applying to the Family Court over assets or dealings that the financial agreement addresses. This omits all the associated legal costs that are often included in protracted divorces. Ultimately, this implies more assets for both of you pursuing the divorce. Since you don’t have to show up before court, this also means you don’t have to make financial disclosures to the court. Essentially, they are forms of legal and financial insurance in the worst case scenario.

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