Consent orders and BFAs are both legally binding methods of settling property matters when a relationship dissolves.There are, however, some important differences between them.
Key Differences between a BFA and Consent Orders.
Involvement in the judicial system
- In family court, consent orders are made only if the court finds them to be “just and equitable,” which means fair and reasonable.
- A BFA is a contract between two parties that does not need to be approved by a court or a third party.
Fairness as a consideration
- Courts will review consent orders to ensure they are just and equitable, so they must be fair and reasonable. In order to prevent financial abuse, the Family Court will only accept agreements that it considers fair.
- The terms of a BFA don’t have to be fair. It is possible for one party to have a more advantageous settlement. In order to ensure that clients know whether the agreement is fair, you should seek independent legal advice.
Documents for legal advice and witnessing.
- A Consent Order does not require either party to obtain legal advice or to have an external witness witness the agreement.
- BFAs require both parties to have their own lawyers to provide independent legal advice. There is usually an additional charge for this.
What can they cover?
- Financial and property agreements as well as parenting agreements can be covered by consent orders.
- BFAs: Deal only with financial or property matters. Consent orders are also required if parenting matters are involved.
Is one more enforceable than the other?
- A simple enforcement procedure is used by the court for consent orders.
- A BFA can only be enforced if a court application is made. Since the court must first determine if the agreement is enforceable, this can be an expensive and time-consuming process.
Choosing between a Consent Order and a Financial Agreement (BFA): Which is better?
Consent orders: When to use them:
- For couples with straightforward financial situations without complex assets or debts, Consent Orders are a more direct and precise approach.
- In cases where both parties want an equitable split and want the court to review and ensure the agreement is fair, consent orders are the best option.
- Parents seeking a comprehensive solution to their parenting and property disputes should consider Consent Orders.
- BFAs require both parties to seek independent legal advice, which can be expensive. In amicable separations, consent orders can be more cost-effective if legal fees are minimized.
- Especially if one party may not uphold its end of the bargain, consent orders are more enforceable if there are concerns about the agreement’s future enforceability.
A BFA is a good choice when:
- A BFA allows for such flexibility if a couple has mutually agreed on an asset division that might seem unfair to outsiders, such as one spouse keeping a larger percentage of assets.
- Privacy-conscious clients: A BFA allows couples to settle property matters without the court’s scrutiny.
- In a BFA, couples can include future inheritance provisions or specific time periods that Consent Orders do not typically cover
If you have any questions about Consent Orders, please contact our office in Brisbane or Sydney or request a quote
