When a relationship breaks down, one of the most pressing concerns is how to divide assets and financial responsibilities fairly. In Australia, two primary legal mechanisms can help couples formalize their financial arrangements: Binding Financial Agreements (BFAs) and Consent Orders.
But which one is right for you?
This article will explore the key differences, advantages, and disadvantages of both options, helping you make an informed decision based on your unique circumstances.
Understanding Binding Financial Agreements (BFAs)
A Binding Financial Agreement (BFA), sometimes referred to as a “prenup” or “postnup,” is a legally enforceable contract between couples that outlines how assets, debts, and financial resources will be divided in the event of separation.
BFAs can be made:
- Before marriage (prenuptial agreement)
- During the relationship
- After separation (post-separation agreement)
Key Features of a BFA
✅ Flexibility – Couples can agree on any terms they choose, as long as both parties fully understand the agreement.
✅ No Court Involvement Required – The agreement is private and does not need court approval.
✅ Can Cover Various Scenarios – Can include property division, spousal maintenance, and even future inheritances.
Potential Downsides of a BFA
❌ Strict Legal Requirements – Must be in writing, signed by both parties, and each must have independent legal advice.
❌ Can Be Challenged in Court – A court may set aside a BFA if it’s found to be unfair, fraudulent, or if circumstances have drastically changed.
❌ No Court Oversight – Since a judge doesn’t review it, there’s a risk of unfair terms slipping through.
When Should You Choose a BFA?
✔ You want a private agreement without court involvement.
✔ You have complex financial arrangements (e.g., businesses, trusts, overseas assets).
✔ You want to protect future assets or inheritances.
Understanding Consent Orders
Consent Orders are formal agreements approved by the Family Court, making them legally binding. Unlike a BFA, they require court approval to ensure fairness.
Key Features of Consent Orders
✅ Legally Enforceable – Once approved by the court, they have the same weight as a court order.
✅ Court-Scrutinized for Fairness – A judge reviews the agreement to ensure it’s just and equitable.
✅ Covers Parenting Arrangements Too – Can include both financial and parenting matters.
Potential Downsides of Consent Orders
❌ Requires Court Approval – The process can take weeks or months.
❌ Less Flexible – The court may reject terms it deems unfair.
❌ Public Record – Unlike BFAs, court orders are part of the legal system (though not always publicly accessible).
When Should You Choose Consent Orders?
✔ You want court-backed security to prevent future disputes.
✔ You need to formalize both financial and parenting arrangements.
✔ You prefer a judge to review fairness before finalizing.
Key Differences Between BFAs and Consent Orders
| Feature | Binding Financial Agreement (BFA) | Consent Orders |
|---|---|---|
| Legal Status | Private contract | Court-approved order |
| Court Involvement | No | Yes |
| Flexibility | High (custom terms) | Moderate (must be fair) |
| Enforceability | Can be challenged | Stronger enforcement |
| Privacy | Fully private | Part of court records |
| Timeframe | Faster (if both agree) | Slower (court processing) |
| Cost | Can be expensive (legal advice required) | Moderate (court fees + legal advice) |
Which One Should You Choose?
The best option depends on your situation:
Choose a BFA If…
🔹 You want full control over the terms without court interference.
🔹 You have complex assets (businesses, international properties).
🔹 You prefer privacy and a quicker process.
Choose Consent Orders If…
🔸 You want court-backed security to prevent future disputes.
🔸 You need to include parenting arrangements alongside financial matters.
🔸 You want a judge to ensure fairness before finalizing.
Can You Have Both?
In some cases, couples may use a BFA first (for immediate protection) and later apply for Consent Orders for stronger enforceability. However, once Consent Orders are made, they override any previous BFAs on the same matters.
Common Pitfalls to Avoid
For BFAs:
⚠ Not getting independent legal advice – This can render the agreement invalid.
⚠ Hiding assets or financial details – Full disclosure is required.
⚠ Unfair terms – If one party is severely disadvantaged, a court may overturn it.
For Consent Orders:
⚠ Unrealistic proposals – Courts reject unfair or impractical terms.
⚠ Incomplete financial disclosure – Both parties must be transparent.
⚠ Delays in filing – The longer you wait, the harder it may be to agree.
Final Thoughts: Making the Right Decision
Both Binding Financial Agreements and Consent Orders have their place in family law. If you value privacy and flexibility, a BFA may be best. If you prefer legal certainty and court oversight, Consent Orders are the way to go.
Still unsure? Consult a family lawyer to discuss your specific needs. A well-drafted agreement now can save you time, money, and stress later.
