Consent Orders and Binding Financial Agreements (BFA) are the two ways of documenting an agreement reached by you and your former partner about the division of your property and assets after separation. They are the only methods that are legally binding and enforceable.
Consent Orders are the most common way of formalizing an agreement reached between you and your former partner following the breakdown of a relationship. After a process of negotiation and agreement Consent Orders are drafted and filed in Court. The Court then considers the proposed Orders and will only make them if they are satisfied that the terms of the Orders are “just and equitable” to both parties in all the circumstances. One benefit of Consent Orders is that they can be used to finalise both property and parenting matters. They are also generally considered to be the quickest and least expensive method.
A BFA is used to document how property and assets are to be divided. A BFA can be created at any time before, during or after a relationship however it cannot be used to deal with parenting or child support issues. Unlike Consent Orders, a BFA is not filed in Court. A Court does not need to be satisfied that the terms are “just and equitable”. They do however have strict legal requirements that must be followed in order for the BFA to be legally binding and enforceable. This includes a requirement that both parties receive independent legal advice. One benefit of the BFA is its ability to extinguish spousal maintenance rights.
Which Is Better?
Consent Orders and BFAs are both effective ways of providing security and finalisation to your property settlement without the time, expense and stress of litigation. Which option is better will depend on your individual situation and circumstances.
For more information or advice on which method is best for you call WMD Law on (02) 9525 8688.