Binding financial agreement versus consent orders

What is the difference between a BFA and consent orders?

Consent orders are agreed orders approved by a court. A binding financial agreement, often called a BFA, is a private statutory agreement that does not require court approval but requires each party to obtain independent legal advice and comply with strict legal requirements. Neither option is automatically better for every couple.

Issue	Binding financial agreement	Consent orders
Court approval	Not ordinarily filed for approval	Court approval required
Independent legal advice	Mandatory for each party	Not technically mandatory in every application, but strongly recommended
Court fairness assessment	No approval assessment when made	Court considers statutory requirements
Privacy	Private agreement	Filed with Court; access governed by Court rules
Timing	Can be used before, during or after a relationship where statutory requirements permit	Commonly used after separation for agreed outcomes
Challenge risk	May be set aside on statutory grounds; technical compliance is important	May be varied or set aside only in legally recognised circumstances
Superannuation	May address superannuation subject to legal requirements	Splitting orders commonly used with procedural fairness
Drafting complexity	Often substantial	Application, proposed orders and supporting financial information required

When might consent orders be considered?

Consent orders are commonly considered when separated parties have reached an agreement and want enforceable orders dealing with property, superannuation, liabilities or parenting arrangements. Financial consent orders must satisfy the Court’s legal test.

When might a BFA be considered?

A BFA may be considered where parties want to regulate financial arrangements privately, including before marriage or cohabitation, during a relationship or after separation. Suitability depends on circumstances, bargaining position, disclosure, complexity and future risks.

Why does independent legal advice matter?

For a BFA, each party must obtain independent legal advice about the agreement’s effect and the advantages and disadvantages at the time advice is provided. Each person needs a separate lawyer. The document must not be treated as a standard form that both parties simply sign.

Questions to ask before choosing

• Has complete financial disclosure occurred?
• Are there companies, trusts or overseas assets?
• Does the arrangement need to split superannuation?
• Are there future inheritances or business risks?
• Is either party under pressure or at a disadvantage?
• How will property, loans and guarantees be implemented?
• What tax and duty advice is required?
• What could cause the arrangement to be challenged?

Next step: Obtain advice about the appropriate legal mechanism before treating an informal agreement as final.