When it comes to finalizing financial arrangements in the context of a divorce or separation in Australia, two commonly used legal instruments are Consent Orders and Binding Financial Agreements (BFAs). Both options provide a legally binding framework for property division and financial settlements. In this article, we will explore the differences between Consent Orders and BFAs, emphasising the requirement for legal advice and considerations to help you determine which option may be better suited for your circumstances
Consent Orders:
Consent Orders are a formal agreement approved by the Federal Circuit and Family Court of Australia. They outline the agreed-upon financial arrangements between parties and are enforceable under Australian law. Unlike BFAs, obtaining legal advice is not mandatory for Consent Orders; however, it is regularly recommended by the court to ensure informed decision-making. Consent Orders can be drafted by one party’s solicitor and then signed by both parties.
Advantages of Consent Orders:
Court Approval: Consent Orders require the court’s endorsement, providing an added level of assurance and enforceability. Once a consent order is in place, when a parenting order is made, each person affected by the order must comply or follow the order. This includes taking all reasonable steps to comply with the order. The law on contravention of orders is complicated. If you allege that a person has contravened an order without a reasonable excuse, you should seek legal advice.
If any party would like to change the order, you will need to show that there has been a significant change of circumstances that makes a change necessary. This is a high threshold and extremely difficult to satisfy.
Simplicity and Convenience: The process of obtaining Consent Orders is typically straightforward, especially if both parties are in agreement. The court will review the agreement and, if satisfied, grant the orders.
Flexibility: Consent Orders can cover a wide range of matters, including property division, parenting arrangements, spousal maintenance offering comprehensive solutions
Binding Financial Agreements (BFAs):
BFAs are private agreements entered into by parties without court involvement. They require both parties to obtain independent legal advice before signing, ensuring that each party understands their rights, obligations, and the implications of the agreement. BFAs can be made before, during, or after a marriage or de facto relationship.
Advantages of Binding Financial Agreements
Flexibility and Control: BFAs offer greater flexibility in terms of the arrangements agreed upon, as parties have more freedom to tailor the agreement to their specific needs and circumstances.
Streamlined Process: Without the need for court involvement, BFAs can be more time and cost-effective, as they eliminate court filing fees and potential court appearances
Choosing the Right Option for You:
The decision between Consent Orders and a BFA depends on various factors, including the complexity of your financial situation, the level of agreement between parties, and your desire for court involvement. If you have reached a clear agreement with your former partner and seek court approval for added security, Consent Orders may be the preferred option. On the other hand, if you value privacy and wish to retain more control over the terms of the agreement, a BFA could be more suitable.
The decision between Consent Orders and a BFA depends on various factors, including the complexity of your financial situation, the level of agreement between parties, and your desire for court involvement. If you have reached a clear agreement with your former partner and seek court approval for added security, Consent Orders may be the preferred option. On the other hand, if you value privacy and wish to retain more control over the terms of the agreement, a BFA could be more suitable.