Binding Financial Agreement (BFA): 5 Pros& Cons You Should Consider

A Binding Financial Agreement was introduced on 27^th December 2000 under the Family Law Act 1975. The purpose of the agreement was to allow the parties involved to manage their assets as they see fit in case of separation or divorce. The agreement does not only protect the partners and the courts from long and painful divorces but it can also protect faiths of employees of the businesses owned by the spouses as well as other parties involved in their lives. Even though it was generally introduced for a reason, it is famously controversial. We can analyze it through its pros and its cons.

True love

Signing a BFA prior to your marriage can prove the honest intentions you have towards your partner. If one partner is wealthier than the other one, willingness to accept a BFA can show that the only reason for entering a marriage is love, respect and the people themselves.

Protect your property

The main purpose of a BFA is to protect separate assets that each of the partners had prior to marrying. If a divorce takes place, there won’t be a need to prove whether the partners came to a possession of something together or it originally belonged to one of them

Have a civil agreement in case of a divorce

A BFA also allows you to decide how you want to divide your mutual property or ventures if you get a divorce. The fact that you are making this decision while you still respect and care for the other person provides that you will come to an agreement quickly and that it will be fair on both parties.

Assign debt

Apart from dividing what you have, a BFA can also regulate the losses. You can include a clause explaining what happens to any debts that may have occurred. There is no reason why one person should take responsibility and lose their assets over their partner’s conduct.

Protect your children

In case one of the partners has heirs from their previous marriage(s), a BFA is a good way of protecting them. You can ensure that they do not lose their inheritance through your potential divorce.

Trust issues

Starting a marriage while thinking that it may end is bad enough, not to mention the fact that your future spouse may think you have an ulterior motive for marrying them. A proposal to sign a BFA may be hurtful to the other partner as they can perceive it as your lack of trust in them.

Wasted investments

Once you sign a BFA you have to live a life of constant financial balancing. If you are trying to achieve something together, you need to ensure that both sides are equally involved. Investing in your spouse’s business or property may turn out to be a bad decision as a divorce may lead to a loss of that investment due to the agreement.

The agreement can be manipulated

A BFA is only legal if both sides have signed it and if they have, prior to signing, had been legally advised by two different lawyers who will also include certificates proving that they have provided legal advice to the parties. However, this as everything else can be manipulated. Withstand Lawyers advise that sometimes it can appear that one of the parties had better knowledge of their rights while making the agreement and thus led the other party to agree to unjust conditions. They stress the importance of making an informed decision when signing the document.

It can be overthrown

Having children is also something you will have to predict and regulate. If not listed in the agreement, regardless of what it stipulates, there will have to be a discussion regarding the property and the allowance for the children. FBA only refers to property and finances and it cannot regulate the question of custody.

Spousal allowance

Depending on the agreement the parties had, and conditions that may have changed afterward, regardless of what the BFA states, the amount of spousal maintenance will have to be determined in case one of the parties is incapable of supporting themselves.

I certainly hope that both you and your partner can feel confident about this agreement. Due to many emotional and practical issues that the process of making a BFA can cause, my advice to you is to seek legal consult, not because you have to but because you need to, individually, understand your rights. Also, discuss the conditions of the agreement beforehand to avoid later tension.