Financial agreement procedure
You may be surprised to hear, but drawing up a financial agreement is one of the ways to a good relationship based on trust. Through this agreement, the couple regulates the division of property between them in case of separation. This ensures that their relationship is free of financial interest and that they are with each other out of love and a desire to be together. In addition to this, a financial agreement can prevent financial conflict during a divorce and it also offers additional protections to the spouses, such as protection from creditors.
What is a financial agreement?
A financial agreement is a contract between spouses that regulates their financial relationship. In its framework, the division of property between the parties is regulated in the event of a divorce or separation of public figures. Signing a financial agreement will prevent the development of a financial conflict between the spouses, when the relationship will run into a crisis, thus making the separation easier from a legal and emotional point of view. why? Because the division of property, which is usually a central point of dispute between spouses, has already been settled in advance in the agreement. This is done when the relationship was good and loving, which usually ensures that the agreement is fair and respectful for both parties. It is common to think that financial agreements are intended to protect only the affluent party in the marital relationship, but in fact, when the agreement is drafted in a fair way, it provides financial protection to both parties and is a solid anchor for their relationship, both financially and emotionally. This is because it removes the financial interest from the equation and both spouses can be sure that they are living together out of sincere desire and love for each other.
What does the agreement include?
Each contract should be adapted to the specific circumstances of the parties to it and the same is true when it comes to a financial agreement. At the same time, there are general guidelines common to every financial agreement, as we will explain below. The basis of a financial agreement is the separation between the private property of each spouse, and the joint property. While the first will return to its owner at the time of separation, the second will be divided between the parties in the manner determined by them in the agreement. Care must be taken to include in the financial agreement all the property that the spouses managed to accumulate, separately and together, on the eve of drawing up the agreement, and it must refer to the property that will be accumulated. The agreement must refer to all types of property, including gifts, inheritances, as well as assets whose value can change, such as real estate assets, shares, etc. Also, as we will see below, a financial agreement can also refer to the issue of debts and provide protection from creditors. The complexity of a financial agreement, along with the need to adapt like a glove to the couple, shows the importance of contacting a family law attorney who will create for the couple a financial agreement suitable for their circumstances and which will fulfill its purpose for them should they decide to separate at some stage of their relationship.
Creditor protection
In addition to avoiding a financial conflict during separation, a financial agreement also carries additional importance, for example protection from creditors. When one of the spouses falls into financial debts, for example, a debt to a bank, a debt to a supplier as part of an independent business, etc., then the creditors will be able to try and pay off the debt from both spouses. This is unless there is a financial agreement that separates property in this matter and states that the obligations of each party in the relationship are theirs alone and it will not be possible to obligate the spouse. We emphasize that receiving protection from creditors is particularly relevant when the agreement was signed a significant period of time before the debts accrued. If not, the creditors can try and invalidate the agreement in court, on the basis of the claim that it was signed only for the purpose of evading the repayment of the debt. It is worth noting that in addition to drawing up a financial agreement, there are other ways to effectively defend against the spouse’s debts and the lawyer can be consulted on this issue as part of contacting him for the purpose of drafting the agreement.
Financial agreement – when is it signed?
The answer to this question is simple, whenever the couple wants it. There are couples who choose to sign a financial agreement before marriage, in order to know that they are walking together under the canopy, when this issue is settled between them. Other couples make the decision after marriage, sometimes following a significant financial change. The only difference is in the agreement approval procedure. What is meant by? A financial agreement requires the approval of a notary or a legal court, in order for it to be legally valid. This is due to the fact that the parties to it are spouses and it must therefore be verified that they made the agreement of their own free will and without pressure or coercion from their spouse. When a financial agreement is signed before the marriage, the couple will contact a notary or a legal court, according to their choice, while signing a financial agreement after the marriage requires an application to the court. Also, even well-known couples, couples who do not intend to formalize the relationship, can draw up a financial agreement and this is a highly recommended step for them. Firstly, to manage a relationship with peace of mind, secondly, to avoid financial conflict during separation and thirdly, to eliminate the need to prove the status, a preliminary step required in order to demand rights within the relationship.
Cost of finance agreement
Naturally, it is difficult to determine in advance what the cost will be for drawing up a financial agreement, as this depends a lot on the circumstances of the matter. There are relatively simple agreements, from the spouses at the beginning of their journey and have not yet had time to accumulate property, or receive valuable gifts or inheritances. On the other hand, financial agreements can be very complicated, due to the existence of many different kinds of property, therefore, the work of drafting the agreement is greater and requires the lawyer to invest considerable time in its construction. If one of the spouses has a business with his family members, if the spouses took a loan from their parents, etc., then in each of these the complexity of the agreement must be affected and therefore, the amount of fees charged by the lawyer for its preparation. In this regard, we note that it is possible to contact several lawyers in order to get an indication of the cost of the agreement and to choose a lawyer whose offer is fair and whose professionalism you are impressed by. In this context, it is important to beware of fee offers that are lower than usual because they usually mean that the lawyer will not devote the necessary attention to the construction of a professional and comprehensive agreement, so it is better to avoid his services.
Drawing up a financial agreement – with a family lawyer
Have you made a decision to enter into a financial agreement? In light of the financial significance inherent in it, it is very important to contact a family lawyer who will draft the agreement for you. The lawyer will make sure to include in the agreement all the property that you currently own, together and separately, and separate in a clear and unambiguous manner what is personal property and what is joint property. The agreement will refer to future property, its types, the individual issues relevant to you according to your life circumstances and will ensure that the agreement will provide you with a full legal and financial solution. Also, the lawyer will be at your disposal to update the required financial agreement from time to time, in order for it to continue to provide you with effective proprietary protection. Yes, the lawyer will guide you on how to conduct yourself practically in order to avoid destroying the agreement with your behavior. Not infrequently, spouses sign a financial agreement, but act in a contradictory manner, so it can lose its validity. It must be remembered that the purpose of the agreement is to be an emotional and financial anchor for the couple and to prevent the formation of a financial conflict in the event of separation. The fulfillment of these depends on the expertise of the lawyer drafting the agreement, which is why it is so important to be careful to contact an office that specializes in family law and has experience in drafting financial agreements.
