Binding Financial Agreements vs Consent Orders
If you are able to reach an agreement on the division of property, the family lawyers at Ascent Lawyers can assist you to prepare one of the following documents to make a property settlement legally binding while safeguarding your interests:
- Binding Financial Agreement
- Consent Orders
1. Binding Financial Agreement
1.1 What is a Binding Financial Agreement?
A Binding Financial Agreement sets out how all or any of the property or financial resources of either or both of the parties to the relationship is to be divided. Sometimes people know these agreements as ‘prenuptial agreements’ but the legal term is ‘financial agreements’.
A Binding Financial Agreement is the most cost-effective way for the parties to finalise a property settlement.
You can make a financial agreement before, during or after a marriage or de facto relationship. These agreements can cover:
- financial settlement (including superannuation entitlements) after the breakdown of the relationship
- financial support (maintenance) of one party by the other after the breakdown of a marriage or a de facto relationship
- or any incidental issues
1.2 Can we draft and sign a Financial Agreement without a lawyer?
While it may be possible for you to reach an agreement in writing with your former partner regarding financial issues, such an agreement is not legally binding. In other words, it can be overturned by any party.
A Binding Financial Agreement is only legally binding when:
- The Agreement is signed by both parties.
- Before signing the Agreement, each party was provided with independent legal advice about the effect of the Agreement on their rights, as well as the advantages and disadvantages of making the Agreement.
- After signing the Agreement, each party was provided with a signed statement by their lawyer confirming that advice was provided.
- Signed copies of the two lawyers’ statements are exchanged between the parties.
- The Agreement has not been terminated or set aside by the court.
1.3 Can a Binding Financial Agreement be overturned?
Yes, Binding Financial Agreements can be overturned by the Family Court if they are not carefully drafted or properly executed.
The most common reasons for Binding Financial Agreements to be set aside are as follows:
- The Agreement was obtained by fraud or under duress (for example, requiring someone to sign shortly before the wedding under threat).
- There was failure to disclose assets or relevant information.
- The Agreement was entered to defeat or defraud a creditor
- There have been significant changes to either parties’ circumstance
- There has been changes in circumstances relating to a child, and it would result in hardship for the child or their caregiver if the Agreement is not set aside.
To ask the Court to set aside a Binding Financial Agreement, you will need to file an application with the Court, including an order to declare the agreement invalid and deal with the enforcement.
If the Agreement is set aside, then each party is free to apply to the court for a property settlement, like any other separated couple.
2. Consent Orders
If both parties wish to obtain a higher level of security and formality, you may consider applying for Consent Orders. However, Consent Orders are more time-consuming and costly compared to Binding Financial Agreements.
2.1 What are Consent Orders？
Consent Orders are written agreement approved by a court.
You and the other party can apply for Consent Orders to be made without going to court. Consent Orders have the same legal effect as if they had been made by a judge after a court hearing.
Consent Orders about property and financial orders may deal with:
- transfer or sale of property
- splitting of superannuation
- child maintenance and spousal maintenance
2.2 How do I apply for Consent Orders?
To apply for Consent Orders, you must prepare relevant documents and ensure that documents are filed with the Court.
Other than documents, there are various considerations to ensure that you can obtain the order you are seeking.
Experienced family lawyers at Ascent Lawyers will understand your specific circumstance, provide you with tailored advice and assist you in obtaining the desired orders.
2.3 Is there any time limit for applying for Consent Orders?
You may file application for consent order any time after separation. But if you wish to seek orders from the court, it should to be filed within:
- 12 months of a divorce or
- 2 years since the end of a de facto relationship
2.4 How much does it cost to apply for Consent Orders?
You will need to pay legal fees for preparing the Application for the Consent Orders, as well as court filing fees.
2.5 How long does it take to obtain Consent Orders?
After the Application for Consent Orders is submitted, you must wait for it to be heard by the judge and be ready to amend the proposed orders as the judge directs.
There is no fixed timeframe as to how long it would take for the orders to be granted.
2.6 What does the Court need to consider?
The Court considers the facts of each case and in making orders:
- in parenting cases, considers the best interests of the child, and
- in financial cases, that the terms are just and equitable.
3. Difference between Binding Financial Agreement and Consent Orders
|Binding Financial Agreement
|Who decides what can be included?
|Is the division fair and reasonable?
|Not necessarily. The agreement will reflect agreement reached by both parties.
|Yes. Court must decide if agreement is just and equitable.
|Must obtain independent legal advice?
|Is it flexible?
|Is it enforceable?
|Yes, if both parties obtained independent legal advice.
|Yes, enforced by court.
|Can I alter agreement?
|Must obtain court order
|What can it include?
|Financial or property matters
|Financial or property matters
If you want to learn more about Binding Financial Agreements or Consent Orders, please don’t hesitate to contact us. We are here for your best interests!