Financial Agreements: A Positive Way Forward in Your Relationship
The end of your relationship has left you emotionally bruised and battered, and you are only just beginning to financially pick up the pieces.
Then you meet somebody new.
Realising now that not all relationships end happily ever after can place a real strain on how you relate to a new partner. You might be putting up barriers without even realising. For some, giving away your heart again is made difficult when you feel that you potentially could also be giving away your hard earned assets.
Clear communication is a key factor in successful relationships. A conversation which discusses how you would like to arrange your finances should you and your partner split in the future may be difficult, but ultimately very beneficial. Most relationships flounder as a consequence of miscommunication. So, if you are able to clearly convey your expectations as to how you are going to share your lives and finances from the outset of the relationship, this can ultimately avoid arguments and misunderstandings; fundamental contributors to the breakdown of any relationship.
Most couples who have already been through a separation are conscious of how financial issues can impact upon a relationship, and will do everything possible to avoid the anguish which can result from money disputes in the future. On this basis, it is also much easier to reach agreement as to how your assets are to be divided whilst your relationship communication is positive, as opposed to being on the decline. When you combine the common sentiment of initial happiness with the mutual optimism to make things work at the forefront of a new relationship, you have a recipe for a positive conversation regarding your financial future. This discussion can also remove one major barrier which may be impeding upon your romantic relationship from flourishing.
Many clients are eager to protect what they bring to the table at the commencement of their relationship. They may also want to protect what they have accumulated for their children from their first relationship. The way in which parties protect their initial capital bases, especially if they wish to build assets with their new partner into the future, is a common issue that then arises. This protection can be achieved by parties entering into a Financial Agreement. The Agreement can be arranged prior or subsequent to the commencement of parties living together or after they have been married.
A Financial Agreement is a contract between the couple which sets out how they will operate their finances during their relationship and how they will then divide those assets in the unfortunate event that the relationship ends. Depending on the financial circumstances of the parties, this can be a complex discussion. A Financial Agreement can be viewed in many respects like an insurance policy guarding against potential negative outcomes. Similar to insurance, it is ultimately much cheaper to invest time and energy into preparing a sound Financial Agreement at the beginning of your relationship, rather than spending a lot more time, emotion and money in dividing your asset pool at the end of your relationship.
For expert advice please contact a member of the Family Law team.
