Consent orders and binding financial agreements are both legal ways that separating or divorcing couples can formalise their property settlement.
There are significant differences between the two. Here are the key distinctions:
Nature and formality
Consent orders are an agreement reached between you and your ex-partner and then submitted to the Federal Circuit and Family Court or Family Court of Western Australia for approval.
Once approved, consent orders have the same legal effect as a court order granted by a judge at the end of a contested hearing.
Consent orders can cover various aspects of a separation including property division, spousal maintenance and child custody.
Binding financial agreements (also known as pre-nups, post-nups, financial agreements and BFAs) are private agreements made between couples without involving the court.
Like consent orders, BFAs are governed under the Family Law Act.
Unlike consent orders, BFAs are not filed with the court for approval and have no requirement to be fair and equitable.
However, to be considered binding and enforcable BFAs must meet certain legal requirements, including the requirement for each person to have received specific independent legal advice before entering into the agreement.
Legal protection and finality
Once consent orders are approved by the court, they are legally binding and enforceable. If either party fails to comply with the orders, the other party can seek enforcement through the court system. It is difficult to challenge consent orders.
Binding financial agreements are intended to provide certainty and finality to a couple’s financial arrangements. However, they are subject to a higher risk of challenge or being set aside compared to consent orders.
Flexibility and modification
Consent orders offer some flexibility in modifying the terms of the agreement. However, any modifications require the consent of both parties and court approval.
Changing the terms of a binding financial agreement can be more challenging than modifying consent orders, as both parties must agree to the changes and they must be documented with the same degree of formality and independent legal advice as the original agreement, which can involve significant legal costs.
Court involvement and cost
Consent orders involve an administrative court process. The documents are filed electronically and no-one goes to court.
Consent orders provide a streamlined process for couples who can reach an agreement without the expense of litigation.
Binding financial agreements do not require court involvement unless one party seeks to have the agreement set aside. However, drafting and obtaining independent legal advice for a binding financial agreement usually incurs higher legal costs than consent orders.
Our consent orders for property settlement give you an affordable and accessible solution. Our family lawyers will assess your situation and prepare consent orders to address your specific needs.