Going through a divorce can be a difficult and emotional time. During this challenging time, you might be thinking ‘What is a financial agreement in a divorce?’. We’ve put this useful guide together to break it down for you.
In addition to the emotional upheaval, there will be many financial matters that need to be addressed. One of the most important financial decisions that you will need to make is how to divide your assets and debts.
What is a financial agreement?
While most people assume the financial agreement is part of the divorce, it is a separate process.
There are a number of different ways to divide your assets and debts in a divorce. One option is to reach an agreement with your spouse through negotiation or mediation. If you are able to reach an agreement, you will need to have it formalised in a legal document called a financial agreement.
Is a financial agreement legally binding?
A financial agreement is a contract that sets out the terms of your financial settlement. It is important to note that financial agreements are not always enforceable. For a financial agreement to be enforceable, it must be fair and reasonable, and it must be entered into voluntarily.
If you are unable to reach an agreement with your spouse, the court will decide how to divide your assets and debts. The court will consider several factors in making its decision, including the length of your marriage, your respective incomes and earning capacities, your contributions to the marriage, and the needs of any children.
What does a financial agreement protect?
You’ll be pleased to know that a financial agreement is a multi-faceted legal agreement that sets out to protect many financial areas. A financial agreement can protect a number of things, including:
- Property: The family home, investments, and other assets.
- Income: This could include salaries, pensions, and other sources of income.
- Debts: Including mortgages, credit card debt, and other debts.
- Maintenance: Payments to one spouse or civil partner to support them financially after the relationship ends.
- Child support: Money to be spent on raising the children
- Pensions: You may have a large pension that you’d like to protect.
- Family inheritance: Your family may have capital and assets they need to protect from your ex-spouse.
- Future partners: The financial agreement also helps keep future partners on both sides from having any financial influence.
How do I apply for my financial agreement?
If you are going through a divorce, it is important to speak to a solicitor about your financial options. We will help you understand your rights and options and help you negotiate a fair and reasonable financial settlement.
Your solicitor would typically aim to process the financial agreement before the Decree Absolute. Why? The financial agreement can become more complicated once the divorce is finalised.
Why do you need a financial agreement?
Unsurprisingly, even though you may be amicable with your ex, money can bring out the worst in people. By getting your financial agreement in order, you’ll be safeguarding yourself as well as having peace of mind.
Avoids going to court
Going to court can be a lengthy and expensive process. If you can reach an agreement with your spouse, you can avoid the cost and hassle of going to court.
Secure your financial future
Knowing that your financial future is secure can help you move on with your life after your divorce.
Protect your children
A financial agreement can help to ensure that your children’s needs are met after your divorce.
How do I get a financial agreement?
If you are considering reaching a financial agreement in your divorce, speak to us at Bromfield Legal as soon as possible. Our highly experienced team will approach your case with compassion and determination. We will help you understand your rights and options, and work to achieve an agreement which is best for you.