By Catherine Curtis-Walsh
There are two options for finalizing the division of property and assets acquired during a relationship in Australia.
Consent Orders
The Federal Circuit and Family Court of Australia (the Court) can make Orders by Consent of both you and your former partner or spouse where agreement has been reached about children’s arrangements, property, superannuation and spousal maintenance.
No Court hearing is required, once an Application has been agreed upon and filed with the Court, a Judicial Registrar will review it and grant the Orders, if the Court agrees that the agreement is just and equitable.
Should the Orders need to be enforced, for example someone has neglected to do what they said they would do, then the Court can utilize its powers to impose penalties or consequences for the person that has not complied with the Orders made.
Binding Financial Agreement
A Binding Financial Agreement (BFA) outlines how assets, liabilities and financial resources will be divided at the end of a relationship. A BFA can be entered into before you are married (often referred to as a pre-nup), during your marriage or after you have separated or divorced.
The Court is not involved in the process of making the agreement and you and your former partner/spouse are free to negotiate the terms that will suit you both. It is a private agreement which is only concerned with financial arrangements. Arrangements regarding children are not included.
It is essential that both you and your partner, former partner or spouse receive independent legal advice about the impact the agreement will have on your financial circumstances. Both of you must receive this advice, generally from separate law firms, in order for the agreement to be valid.
What if we can not reach agreement?
Both Consent Orders and BFAs are the ‘end result’ of an agreement that you and your partner, former partner or spouse have made. If there is no agreement then you will both need to spend some time and energy on negotiating a suitable outcome for both of you. You can do this with the assistance of lawyers, including at a mediation.
Can a Binding Financial Agreement be over turned?
There are some limited circumstances under which a BFA can be over turned, for example, if you or your former partner or spouse did not provide full and frank disclosure of financial matters to each other, or if one of you were pressured into signing the agreement.
How is a Binding Financial Agreement enforced?
A BFA is a private contract, and if there is a dispute, for example, one person does not hold up their end of the bargain, then the aggrieved person can commence litigation through the Court. It is a slightly more complicated process which can sometimes be onerous and costly, compared to Court proceedings when applying for Consent Orders to be enforced.
How do I know which one is right for me?
The decision on whether to formalize arrangements through Court Orders or a BFA is usually made after receiving advice from a lawyer about which option will suit your circumstances best.
This information is general in nature and not a substitute for legal advice based on your individual circumstances. For tailored family law advice about your situation, speak with our Senior Family Lawyer, Catherine Curtis-Walsh, on 03 8621 1000 or advisors@emlawyers.com.au.
