Binding Financial Agreement or Consent Orders?

There are two ways for separating couples to legally finalise their property settlement (without resorting to suing each other):

 

1.      Binding financial agreement; or

2.      Consent orders.

 

Both methods involve the parties reaching a negotiated settlement as to the distribution of their assets, however there are a number of differences in respect to how they are implemented and enforced.

 

Irrespective of the method you choose, legally finalising your property settlement is the most effective way of preventing your former spouse from making a future property claim against you. It will also ensure that you do not miss out on the stamp duty concessions for the transfer of real property between separating spouses, which usually equates to savings in the tens of thousands of dollars.

 

The table below summarises the key differences between the two documents.

BINDING FINANCIAL AGREEMENTCONSENT ORDERS
What is a binding financial agreement (BFA)?

More commonly known as “separation agreements”, BFAs are private agreements which provide for property distribution and spousal maintenance in the event of separation, which do not require approval of the court.
What are family law consent orders?

A consent order is a written agreement regarding property distribution, spousal maintenance and/or parenting arrangements, which is made after separation and approved by the court as just and equitable in the circumstances.
What can a BFA cover?

• Distribution of assets, liabilities and financial resources
• Superannuation entitlements
• Spousal maintenance
• Management of corporate entities, trusts and partnerships
• Inheritances, compensation payments and other windfalls
What issues can consent orders deal with?

• Distribution of assets, liabilities and financial resources
• Superannuation entitlements
• Arrangements for the care of children
• Spousal maintenance
• Management of corporate entities, trusts and partnerships
• Inheritances, compensation payments and other windfalls
What issues cannot be dealt with using a BFA?

• Arrangements for the care of children
• Child support
What issues cannot be dealt with using consent orders?

• Child support
What happens if my spouse breaches the terms of the BFA?

You make an application to the Court for an order that the agreement is valid. Once approved, the court will order your spouse to comply with the terms of the agreement. If your spouse does not comply with the court orders, you can seek enforcement orders and penalties for non-compliance.
What happens if my spouse breaches the terms of the consent orders?

The agreement has already been approved by the court, so if your spouse fails to comply, you can seek enforcement orders and penalties immediately.
In circumstances where documents must be signed as part of the orders (i.e. discharge of mortgage or transfer of property), the court can sign these on behalf of the non-complying party.
Can a BFA be successfully challenged and overturned?

A court may set aside a BFA if it satisfied that:
• The agreement was obtained by fraud e.g. non-disclosure of a material matter
• The agreement is void, voidable or unenforceable e.g. the binding requirements were not fulfilled
• Circumstances have arisen since the agreement was made that make it impracticable for the agreement or part of the agreement to be carried out
• Since the agreement was made, a material change in circumstances that relate to the care, welfare and development of a child of the marriage has occurred
• A party to the agreement engaged in unconscionable conduct in the process of developing the financial agreement e.g. signing the agreement on the parties’ wedding day
Can consent orders be successfully challenged and overturned?

It is extremely difficult to have a consent orders overturned. However, if the court can be satisfied that there was a miscarriage of justice, the property settlement can be reopened.
The most likely grounds for a miscarriage of justice include:
• Fraud e.g. non-disclosure
• Duress e.g. signing on wedding day
• Suppression of evidence or giving of false evidence e.g. overseas bank account
Do I need to see a lawyer?

Yes. One of the requirements to make the agreement “binding” is that each party must obtain independent legal advice from an appropriately qualified solicitor who is issues a certificate of independent legal advice.
Do I need to see a lawyer?

No. You can file consent orders in the Family Court without obtaining legal advice. However, the Court is less likely to approve the orders where the parties have not obtained independent legal advice and you are more likely to agree to a settlement which is unfair or impractical.
What is the cost?

The cost is largely dependent on the complexity of the proposed agreement and the agreeability of the parties.
We draft and review binding financial agreements on a fixed-fee basis which is agreed upon before commencement.
What is the cost?

The cost is largely dependent on the complexity of the proposed agreement and the agreeability of the parties.
We draft and review consent orders on a fixed-fee basis which is agreed before commencement.

If you have recently separated or thinking about separating, make sure you understand your rights, entitlements and obligations.

Next step

Call us on 07 5536 3055 to make a no-obligation appointment with one of our solicitors.

Cost Free Initial Consultation

If you are interested in knowing more about how we might be able to assist you, please call
07 5536 3055 to make a cost free initial, 40 minute consultation with our Principal, Mr Jim Wilson.