What is the difference between a binding financial agreement and a prenuptial agreement?

A binding financial agreement is an agreement that is entered into after two people separate.

A prenuptial agreement (prenup) is a BFA that is entered into before two people separate.

For those about to marry, already married or separated, the Family Law Act allows them to sign a financial agreement. There are three types of financial agreements:

1. Before marriage agreements, where spouses wish to quarantine previously acquired assets from the consequences of separation, or where one spouse comes into a marriage already holding interests in family business structures and there is a desire to protect those business assets from involvement in a court dispute.
2. During marriage agreements, can be used in several circumstances. It may be an agreement made when the parties are happily together and have the same effect as a pre-nuptial agreement, just made after marriage. It may be used when a marriage is in difficulty and a re-arrangement of assets is made to provide security for one or more spouse, as an asset protection measure. It could be an agreement about division of assets made after separation, but prior to divorce.
3. After divorce agreements, used as a means of securing a private settlement without any involvement of a court or third parties.

See Also: What is a prenup?