Just because a couple is living together it does not automatically mean that they are in a de facto relationship within the meaning of certain laws. There are many different factors to consider when assessing and 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, friends and others.
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 your rights (and obligations) are under de facto relationship laws.
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 certain legal rights applicable to a married couple pursuant to the Family Law Act, they are generally required to have been living together as a defacto couple 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
- Whether there has been some express or implied mutual commitment to a shared life together
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 couple decide not to draw up a legally binding Financial Agreement, they may agree to keep all their finances separate which might make it easier to divide their property and financial resources after separation.
This could include:
- Keeping finances and bank accounts separate.
- Not having joint ownership of any property acquired by either of them.
- Each party remaining responsible for their own debts, making their own financial decisions and spending their money as they wish, with no accountability to the other party.
- Not carrying out 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 lives in might be considered to pay rent or board to cover normal living expenses rather than there being any general sharing of expenses of financial support from one party to the other.
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 a family 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 property, financial resources, 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.
Conclusion
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 division of your property and assets away from the Federal Circuit and Family Court of Australia, then you may wish to consider entering into a binding Financial Agreement, especially where one party has significantly greater assets than their partner.
If you or someone you know wants more information or needs help or advice, please contact us on (08) 8344 6422 or email [email protected].