Just because a couple is living together it does not automatically mean they are in a de facto relationship. There are many different factors in determining whether two people are living in a de facto relationship, such as whether they share bank accounts, are in a sexual relationship, and whether they are known as a couple to family and friends. If you are a couple who chooses to move in together with the intention of becoming ’de factos’, then you should be well acquainted with what your rights and responsibilities are under de facto relationship laws. One way to protect your assets is through a binding Financial Agreement (often referred to as a ‘pre-nup’).
What is a de facto relationship?
Contrary to public opinion, there is no set time period that a couple needs to be living together before they can be considered to be in a de facto relationship. However, to be recognised as a ’de facto couple’ and have the same legal rights as a married couple, the Family Law Act generally requires a couple to have been living together for at least two years OR have at least one child from the relationship.
There is no one size fits all checklist of factors to prove that a couple is living in a de facto relationship, rather there are factors that should be taken into consideration when assessing whether a couple are in a de facto relationship. These include:
- Are the couple living together and if so, for how long have they been living together?
- Whether the couple has a sexual/intimate relationship.
- Whether they share joint bank accounts or own property together.
- Whether they share weekly living costs, such as utility bills.
- Whether their family and friends know them to be a couple.
- Whether they share any children.
How do I protect my assets if I’m in a de facto relationship?
One way to protect your assets is through a Financial Agreement (often referred to as a ‘pre-nup’). A Financial Agreement sets out the assets each party has at the beginning of the relationship and how these assets will be divided if they separate. A Financial Agreement is particularly important in circumstances where one party has significantly greater assets than their partner.
If a de facto couple decide not to draw up a legally binding Financial Agreement, they should at the very minimum agree to keep all their finances separate.
This should include:
- Keeping finances and bank accounts separate.
- No joint ownership of any property acquired.
- Each party remains responsible for their own debts, makes their own financial decisions and spends their money as they wish, with no accountability to the other party.
- There should be no financial planning for the couple’s future. There should be no evidence of an intention to provide for the other party in a Will, as a beneficiary in superannuation funds or life insurance policies.
- The party that does not own the home that the couple live in should be contributing rent/board to cover normal living expenses.
If you want to ensure that your assets are protected in the event that your de facto relationship breaks down, we recommend you seek legal advice from an experienced lawyer.
How does the law treat a de facto relationship?
The Family Law Act allows parties in a de facto relationship (for over two years), to make an application to the court for orders to be made about how their assets and liabilities should be divided following a breakup.
There are some exceptions to the two-year minimum period, where:
- the de facto couple share a child;
- their relationship has been registered; and
- one party has made substantial contributions to the other party.
In the above circumstances, the parties can make an application to the court even if the relationship lasted for less than two years.
What are my rights if my de facto relationship ends?
The jurisdiction of the Family Law Act applies to de facto couples who separate and seek financial and other orders. The party making the application must prove that a de facto relationship existed for a period of at least two years and that separation occurred after 1 March 2009.
A party to a de facto relationship can only ask a court to make an order about financial matters after the breakdown of a de facto relationship.
Financial matters include:
- property settlements
- spousal maintenance matters
- superannuation splits
There is a time limit of two years from the date of separation to make a property claim.
De facto couples generally have the same legal rights as a married couple under the Family Law Act. There is no one size fits all checklist of factors to prove that a couple is living in a de facto relationship, rather various factors are taken into consideration when assessing whether a couple are in a de facto relationship.
If you would like to protect your assets in the event your relationship breaks down and prefer to keep the Family Court out of the division of your property and assets, you may wish to consider entering into a binding Financial Agreement, especially where one party has significantly greater assets than their partner.
This information is for general purposes only and we recommend you obtain professional advice relevant to your individual circumstances.
If you or someone you know wants more information or needs help or advice, please contact us on (07) 3372 2232 or email [email protected]. We also offer an initial free consultation if you wish to discuss your situation Free Consultation – SKC Lawyers.