What is a Financial Agreement?
A Binding Financial Agreement (BFA) is a private legal contract between two individuals outlining how their property and finances will be managed in the event of a separation or divorce.
Unlike a Consent Order, it doesn’t require court approval but must comply with strict legal guidelines to ensure enforceability under Queensland law.
What is a Consent Order?
Consent Orders are agreements submitted to the Family Court of Australia or the Federal Circuit and Family Court of Australia (FCFCOA) for approval.
The court assesses the agreement to ensure the terms are fair, reasonable, and consistent with legal principles.
Consent Orders can cover both property division and parenting arrangements.
Key Differences Between BFAs and Consent Orders: Consent Order vs Financial Agreement
Court Involvement
- Consent Orders: Filed with the court, where the terms must meet the “just and equitable” standard under the Family Law Act 1975. The court reviews the agreement to ensure fairness.
- BFAs: These are private agreements and do not require court involvement unless enforcement becomes necessary.
Fairness
- Consent Orders: Must be objectively fair and reasonable, as the court evaluates the terms before approval.
- BFAs: Fairness isn’t a requirement. The terms can be advantageous to one party if both parties agree.
Legal Advice and Witnessing
- Consent Orders: Parties can prepare and submit them without legal advice, but guidance from a lawyer is recommended to avoid errors.
- BFAs: Independent legal advice for both parties is mandatory. Lawyers must certify that advice has been given before the agreement is binding.
Scope
- Consent Orders: Can address both financial and parenting matters.
- BFAs: Limited to property and financial matters only.
Enforceability
- Consent Orders: Easily enforceable through the court’s simplified processes.
- BFAs: Enforceable only after applying to the court, which may review the agreement if challenged.
Visit our guide on prenuptial agreements for a deeper understanding of how a prenup can further secure your financial interests prior to marriage.
Need a Lawyer?
Consent Order vs Financial Agreement: Which Option Suits Your Needs?
The choice between a Consent Order and a Binding Financial Agreement will depend on your circumstances. Here are some examples to help you decide:
When a BFA Might Be Suitable:
- Unequal Division: BFAs allow for flexibility in dividing assets unequally if both parties agree. This is useful when one party retains a larger share due to unique personal reasons.
- Privacy Concerns: For couples wishing to keep financial arrangements private, BFAs ensure confidentiality as they do not require court filing.
- Complex Clauses: BFAs offer flexibility for unusual or detailed clauses, such as provisions for future inheritances or ongoing financial support over specific periods.
When a Consent Order Might Be Suitable:
- Simplicity: If financial matters are straightforward, Consent Orders can be a quicker and more direct solution.
- Fairness: If both parties want an impartial review to ensure fairness, Consent Orders provide court oversight.
- Comprehensive Matters: For couples needing to resolve both financial and parenting issues in a single agreement, Consent Orders offer a holistic solution.
- Cost Considerations: Consent Orders often incur fewer legal fees, especially for amicable separations where legal advice is minimal.
- Enforceability: If enforceability is a concern, Consent Orders have the court’s backing, offering stronger security.
Always Seek Legal Advice
Whether you’re considering a Consent Order or a Binding Financial Agreement, understanding their nuances under Brisbane and Queensland family law is essential.
Both options offer pathways to settle property disputes, but their appropriateness depends on your unique situation.
Engaging a qualified family lawyer is crucial to ensure the agreement is fair, legally binding, and enforceable.
Remember, property settlements aren’t just about dividing assets—they’re about securing your financial future.
Key Takeaway: Consent Order vs Financial Agreement
Choosing between a Consent Order and a Binding Financial Agreement (BFA) depends on your priorities, the complexity of your financial and parenting matters, and your need for privacy or enforceability.
- Consent Orders are ideal when fairness, court oversight, and simplicity are priorities, particularly if you want a legally enforceable solution covering both financial and parenting arrangements.
- BFAs provide flexibility, privacy, and customisation, especially for unique financial arrangements, but require mandatory independent legal advice to ensure enforceability.
Regardless of the option, seeking professional legal advice is essential to navigate the complexities of Queensland family law, secure your interests, and protect your financial future.