How to protect your assets in a de facto relationship

Although a formal ceremony isn’t required to be in a de facto relationship, and different laws apply, they can still hold some of the same rights as a marriage. Because of this, assets held both jointly and solely by either person, regardless of when they were acquired, may mean that either person could receive a legal share of these assets in the instance of a relationship breakdown.

What is a de facto relationship?

A de facto relationship, defined by Australian law, is when two people are deemed to be in a relationship, where they are not legally married, but are living together on a ‘genuine domestic basis’. It is not always this simple, though, as you may still be legally found to be in a de facto relationship if;

  • Either person is still married to another person
  • Either person is in another de facto relationship, or
  • You are in a genuine and commited relationship, but do not live together on a full-time basis

Simply, the courts will review the relationship situation on a case by case basis, checking all evidence to determine if a de facto relationship exists/existed. The courts will look at a wide range of factors to determine this, including;

  • Duration of the relationship
  • Whether a sexual relationship existed
  • The degree of financial dependence or interdependence between the couple
  • The ownership, use and acquisition of property
  • The degree of mutual commitment to a shared life
  • The care and support of any children
  • The reputation and public aspects of the relationship

Making a claim

To make a claim against a former de facto partner, this must happen within two years from the declared end of the relationship, and under Australian law, the person making the claim must prove a defacto relationship existed, within the guidelines of the Family Law Act.

Ways to protect your assets

There are a two main ways to help protect your belongings should your relationship break down:

1. Draw up a Financial Agreement

Drawing up a Binding Financial Agreement can really help to protect and secure your assets in a de facto relationship
Drawing up a Binding Financial Agreement can really help to protect and secure your assets in a de facto relationship

A Binding Financial Agreement can be entered at any time between the couple during the relationship and even during the separation. Similar to prenuptual agreements, this formalises how property, finances and other assets are to be divided, should the relationship break down. This agreement may also outline any other areas either person can and cannot make a claim about.

2. Keep finances separate

Should you not be able to darw up a legally Binding Financial Agreement, at a minimum, you should agree to keep your finances separate, including;

  • No intermingling of finances
  • No joint bank account
  • No responsibility for each others’ debts
  • Each person makes their own decisions on the outgoings of their wages
  • There should be no evidence of intent to provide for the other in a will or as a beneficiary in superannuation funds or life insurance policies (there should be no evidence of financial planning for their future together)
  • Aquired property should be in one person’s name with no joint ownership, and the other person should be contributing to cover all normal living expenses

If you have any ongoing concerns that your relationship could impact on your finances or other assets, we strongly recommend that you seek professional legal advice.

With no upfront fees, we also offer the first hour of your initial consultaton completely free, so that we can assess your needs and ensure you are fully informed of your options.

Contact us for more information and a free consultation.