Consent Orders vs Binding Financial Agreements: Which Should You Choose?
Key Takeaways
- Consent Orders and Binding Financial Agreements (BFAs) are both legally binding ways to formalise arrangements after divorce or separation, but they work differently.
- Consent Orders require court approval and can cover both property and parenting arrangements; a BFA is a private contract covering financial matters only.
- The court filing fee for an Application for Consent Orders is currently $215, while a BFA typically costs more due to the requirement for independent legal advice for each party.
- A BFA can be signed before, during or after a relationship, making it suitable as a form of prenuptial agreement.
- Neither option can be forced on an unwilling partner. Both require genuine agreement between the parties.
Separating couples in Australia generally have two main ways to formalise how they will divide their assets and, where relevant, arrange care for their children. Choosing the right one depends on what needs to be covered, how much privacy matters, and how quickly the agreement needs to take effect.
What Is a Consent Order?
A Consent Order is a written agreement between divorced or separated couples covering financial matters and parenting arrangements. Once approved by the court, it becomes a legally binding court order. Consent Orders are generally the preferred option when children are involved, since a single application can cover both property and parenting arrangements together.
What Is a Binding Financial Agreement?
A Binding Financial Agreement is a private contract that sets out how assets and liabilities will be divided after separation or divorce. It requires no court approval, which makes it more private than a Consent Order, but it is limited to financial matters and cannot deal with parenting arrangements. A BFA can also be entered into before a relationship begins, functioning as a form of prenuptial agreement, which is not possible with a Consent Order.
Learn more about our Binding Financial Agreement drafting service if a private financial arrangement suits your circumstances better than court orders.
Consent Orders vs Binding Financial Agreements at a Glance
| Feature | Consent Orders | Binding Financial Agreement |
|---|---|---|
| Court approval needed | Yes | No |
| Covers parenting arrangements | Yes | No |
| Covers property and finances | Yes | Yes |
| Can be made before the relationship | No | Yes |
| Privacy | Filed with the court | Kept private between parties |
| Typical timeframe | 4 to 10 weeks for court approval | Binding once signed by both parties |
Legal Enforceability Differences
Although both types of agreement are legally binding, they become enforceable in different ways. Consent Orders are agreed by both parties and submitted to the FCFCOA. Once approved by a judge or registrar, they become a court order, and either party can apply to the court if the other breaches the agreement.
A BFA is not approved by a court. Instead, it must follow strict legal rules when being drafted and is enforced through principles of contract law. A BFA covers only the division of finances and can be challenged and set aside on limited grounds, including fraud, duress, unconscionable conduct, or a failure to meet the formal requirements of the Family Law Act, such as each party receiving proper independent legal advice.
Cost and Timing Comparison
A Consent Order is generally the cheaper option, especially where a fixed fee is available, since the cost is known in advance aside from the court filing fee, currently set at $215. A BFA typically costs more because both parties need separate legal representation to receive independent advice and ensure the agreement meets the strict legal requirements to be binding. Costs can be reduced when both parties are already in agreement and the drafting process runs smoothly.
BFAs can be quicker to finalise since there is no court involvement. The agreement becomes legally binding once it is properly signed by both parties. Consent Orders require court approval, which typically takes four to ten weeks depending on the court’s workload, and delays can occur if the court requests further information.
When Court Review Is Required
Consent Orders must be submitted electronically to the court for review. Approval is granted where financial arrangements are just and equitable and parenting arrangements are in the best interests of the children. Once approved, the orders are legally binding without either party needing to attend court.
A BFA is a private agreement between the parties about financial matters. It is never submitted for court review, but it must strictly follow the legal drafting requirements of the Family Law Act to be binding. Because it is not reviewed and approved by a judge before it takes effect, there is a greater risk it will later be challenged and overturned if it was not drafted correctly.
Which Option Suits Amicable vs Contested Splits
Consent Orders work well for amicable splits, since the documents can be drafted quickly when both parties agree. A BFA also suits amicable splits and offers more privacy by keeping asset details out of the court system, though it is generally more costly and does not cover parenting arrangements.
Neither option is suitable for a contested split, since both require the genuine agreement of each party. Attempting to impose either arrangement on an unwilling partner risks the agreement later being overturned due to undue influence. Where a contested split cannot be resolved, litigation is the remaining option, with the court ruling on a fair division that may eventually be converted into a Consent Order.
Differences for Married and De Facto Couples
Under federal law, broadly the same financial rules apply to married and de facto couples, and both types of agreement can deal with spousal maintenance, which must be formalised for de facto couples to be enforceable.
Married couples must file for property settlement orders within twelve months of their divorce becoming final, while de facto couples have two years from the date of separation. Rules can also differ between states. In Western Australia, for example, de facto couples must meet specific eligibility criteria, such as minimum relationship length and WA residency requirements, before superannuation can be split, unlike the more automatic process that applies elsewhere in Australia.
Frequently Asked Questions
What is the main difference between a Consent Order and a Binding Financial Agreement?
A Consent Order is approved by the court and can cover both property and parenting arrangements. A Binding Financial Agreement is a private contract that covers financial matters only and does not require court approval.
Do I need a lawyer to draft a Binding Financial Agreement?
Yes. For a BFA to be legally binding, each party must receive independent legal advice before signing, which is a strict requirement under the Family Law Act.
Can a Binding Financial Agreement be overturned?
Yes, but only on limited grounds, such as fraud, duress, unconscionable conduct, or a failure to meet the Act’s formal requirements. A properly drafted BFA is difficult to challenge.
How long do I have to formalise property arrangements after divorce?
Married couples generally have twelve months from the date their divorce becomes final to apply for property orders. De facto couples have two years from the date of separation.