After a relationship between a couple breaks down or is no longer practicable, a BFA can reduce the financial stress of a separation and allow the couple to separate by mutual agreement, without the need for costly, time-consuming and stressful legal proceedings. While a prudent advisor would have a written credit agreement if parents provide financial assistance to their child and partner for the deposit of a home and in some cases this loan is supported by a registered mortgage, it is important to understand that this type of agreement does not prevent a family judge from ignoring the loan agreement and treating it as such, As if it were a gift. There have been cases where judges have concluded that, although the paper contribution is documented in the form of a loan, they believe that his parents did not expect to repay the amount and that, therefore, the contribution should not be considered a liability when deciding on the allocation of assets. If there are assets such as a family business or a discretionary family retirement home, a BFA can also be beneficial from an estate planning perspective. Since financial arrangements are binding on remittances, they can also be a useful resource for succession planning, especially for second marriages that may include stepchildren. This should not be the case when the parties discuss these issues in advance and reach an agreement to record their expectations and settle their financial affairs. A BFA can indicate how the parties have agreed to allocate the asset pool if the relationship fails. They deal with ownership, financial resources and maintenance, generally described as financial agreements or usually ”pre-nup agreements”, are available to facilitate a couple`s joint planning of their financial future and are often used to protect assets acquired before a relationship or independently, such as family gifts or estates. In addition to the forty assets, they can also be used to determine the final allocation of assets in the event of an unfortunate collapse of their relationship.
4. ”Those who hand over the farm” – this is what estate planners call ”intergenerational wealth transfer” – when parents prepare to retire and intend to hand over the family business to a child and their partner. The financial agreement aims to protect the company or business that has been in the family for some time in the event of a relationship breakdown. .