What Binding Financial Agreements Are For

There are many instances in life where binding financial agreements are needed, be they divorce and property settlement or financial disputes of some other kind. When it involves divorce, family lawyers can give better advice because they will be able to understand the specifics of your situation when you consult with them.

In general, a binding financial agreement is to ensure that assets and debts are divided equally between the two who have divorced or are currently in the process of divorcing. There is no need to wait until the divorce is final before you decide on how to divide the property or cash, whatever the assets are.  If is possible to come to a decision between the two of you without waiting for it to go to court. If you have to go to court there will be court fees to pay and this will mean less for you both.

Once you do come to an agreement about the division of assets and debt, it is essential to have it put into writing. This will prevent your ex-partner from changing their mind about it sometime later.  A Binding Financial Agreement is a document that is recognised in a court of law should your ex refuse to pay or allow you to take possession of any of the assets you both agreed on.

Without this document, the ex can change his or her mind and refuse to give you what was agreed and you will have no recourse to address the situation.  Once the agreement is drawn up and signed it can be presented to a court and the ex can be prosecuted for not complying with the terms of the agreement. This very fact can prevent any such trouble in the future.

Binding financial agreements can also be drawn up when a business partnership is being resolved, ensuring the equal distribution of assets. In many such cases bitter feelings can easily lead to one partner deciding that they should have the most, especially if their perception is that the other partner did not do his or her fair share of work.

It is a good idea to get a lawyer to draw up the documents to ensure it is all legal and has no loopholes in it. It will need to be explained to each person by their own lawyer and signed by each one. It will most likely need to be witnessed as well.  However, such an agreement doesn’t have to be drawn up or witnessed by a lawyer to be valid.

Some agreements are simply verbal, but it is far better for it to be put into writing and signed so that it can be enforced if one party defaults.  A verbal agreement cannot be proven, so it can’t be enforced.