In Australia, the concept of a de facto relationship holds significant legal weight, especially when it comes to property and financial settlements. You might wonder if your de facto partner can claim your assets even if you were never married. The short answer is yes, but the specifics can be complex. Let’s break down how de facto relationships work, what factors the court considers, and how you can protect yourself both when entering and exiting such relationships.
Understanding De Facto Relationships in Australia
A de facto relationship is defined under the Family Law Act 1975 as a relationship between two people (of the same or opposite sex) who live together on a genuine domestic basis but aren’t legally married to each other or related by family. In the eyes of Australian law, a de facto relationship is treated similarly to a marriage when it comes to financial matters, including the division of assets.
De Facto Relationships Without Cohabitation
Interestingly, Australian courts have recognised de facto relationships even in cases where the partners did not live together full-time. For instance, in the case of Jonah v. White, the court found that a de facto relationship existed even though the couple maintained separate residences. The relationship was characterised by a strong emotional bond, financial interdependence, and regular time spent together, including holidays and weekends.
This demonstrates that cohabitation, while a significant factor, is not strictly necessary for a relationship to be considered de facto. Other elements like shared finances, social recognition of the relationship, and mutual commitment play crucial roles in such determinations.
De Facto Relationships of Less Than Two Years
While the general rule is that a de facto relationship needs to have lasted for at least two years for a partner to make a claim on assets, there are exceptions. One notable example is the case of Mullan v. Brundett, where the court found that a de facto relationship existed despite the relationship lasting less than two years.
In this case, the relationship was of significant emotional and financial interdependence, and there was also a child involved. The court considered the overall circumstances, including the substantial contributions made by both parties and the presence of the child, which led to the decision to treat the relationship as de facto, thereby entitling one partner to make a claim on the other’s assets.
When Can a De Facto Partner Claim on Your Assets?
Your de facto partner may be able to make a claim on your assets if:
- You have been in a de facto relationship for at least two years.
- There is a child of the relationship.
- One party has made significant financial or non-financial contributions to the relationship.
- The relationship is registered under a prescribed law of an Australian state or territory.
If any of these criteria are met, your partner could be entitled to a portion of your assets, just as if you were legally married.
Case Example: Smith v. Jones
Consider the case of Smith v. Jones, where the court had to decide on the division of assets after a de facto relationship ended. The couple had been living together for three years, during which time Smith had paid off a substantial portion of the mortgage on their shared home, while Jones took care of the household and their child.
When the relationship ended, Jones claimed a portion of the home’s value. The court considered the length of the relationship, the financial contributions made by Smith, and the non-financial contributions made by Jones. In the end, Jones was awarded a share of the home, highlighting how contributions to the relationship—both financial and otherwise—are key factors in such decisions.
Practical Tips When Entering a De Facto Relationship
1. Consider a Binding Financial Agreement (BFA):
Also known as a “pre-nup,” a BFA can clearly outline how assets will be divided if the relationship ends. This agreement can offer peace of mind and protect both parties.
2. Maintain Clear Financial Records:
Keeping a detailed account of financial contributions (such as mortgage payments, bills, or significant purchases) can be crucial if the relationship breaks down and a dispute arises.
3. Register Your Relationship:
In some states, registering your relationship can help clarify the status of your partnership, which can be beneficial if there is a dispute. However, it also formalizes the relationship in a way that could make asset division more likely.
Practical Tips When Ending a De Facto Relationship
1. Seek Legal Advice Early:
The sooner you understand your rights and obligations, the better you can protect your interests.
2. Negotiate a Settlement:
If possible, try to negotiate an amicable settlement with your ex-partner. This can save time, money, and emotional energy compared to a court battle.
3. Document the Separation Date:
The official date of separation can impact claims on assets, so it’s important to have a clear record of when the relationship ended.
4. Update Legal Documents:
After separating, make sure to update your will, superannuation beneficiaries, and any other legal documents to reflect your current wishes.
If you’re in a de facto relationship or considering entering one, it’s crucial to understand your legal rights and obligations. Whether you’re looking to protect your assets or ensure a fair division should things not work out, professional legal advice can make all the difference. Contact us today for a consultation to discuss your situation and explore your options.
Understanding the complexities of de facto relationships and their legal implications is vital for anyone entering or leaving such a relationship. By being informed and taking proactive steps, you can navigate these situations with greater confidence and security.