Binding Financial Agreements vs Consent Orders: What’s the Difference?
If you and your former partner have reached agreement about how to divide your property after separation, the next step is to formalise that agreement. In Australia, the two most common ways to do this are through either a Binding Financial Agreement (BFA) or Consent Orders. While both are legally binding, they operate in very different ways.
This article explains the key differences to help you understand which option may be more appropriate for your circumstances.
What They Have in Common
Both Consent Orders and Binding Financial Agreements can be used to formalise an agreement about financial matters following separation. These can include:
- Division of property
- Superannuation splitting
- Spousal maintenance (where relevant)
Once properly executed, either option will generally prevent either party from making further claims in relation to the property settlement in future.
Consent Orders
Consent Orders are made by the Family Court, based on documents submitted by the parties. No court appearance is required.
The Court will only approve Consent Orders if they are considered to be “just and equitable” under family law principles. This provides a level of independent oversight and reassurance that the terms are fair and likely to be upheld.
Key features:
- Lodged with the Family Court
- Reviewed and approved by a Registrar
- Have the same legal effect as court orders
- Do not require each party to obtain independent legal advice (although it is recommended)
Consent Orders are usually the preferred option for parties who have already agreed on a fair division of property and simply want it formalised in a legally binding way.
Binding Financial Agreements (BFAs)
Binding Financial Agreements are private contracts between parties, and are not reviewed or approved by a court. However, for a BFA to be legally binding, both parties must receive independent legal advice before signing.
BFAs offer greater flexibility and can sometimes be used where parties wish to depart from what a court might consider a fair or typical arrangement. That said, they can be more complex to draft and are occasionally subject to challenge if the proper legal requirements are not followed.
Key features:
- Not lodged with the court
- Require independent legal advice for each party
- Provide greater flexibility, but more risk if not prepared correctly
- May be more suitable in complex financial arrangements or where court scrutiny is not desired
Which Is Right for You?
The right option depends on your individual situation. If you and your former partner have reached a fair and reasonable agreement and want court-backed finality, Consent Orders are often the simpler and more secure choice.
If you need greater flexibility, have more complex arrangements, or are entering into an agreement before or during a relationship (rather than after separation), a Binding Financial Agreement may be more appropriate—but it requires additional legal steps and care.
Final Thoughts
At Amicable Family Law, we help individuals and couples who have reached agreement about financial matters to prepare legally sound and enforceable documentation. Whether you are considering Consent Orders or a Binding Financial Agreement, we can guide you through the process and make sure your interests are protected.
If you’d like tailored advice about your next step, feel free to get in touch.