The Financial Consequences When Bf/Gf Becomes De Facto Partner
It’s complicated isn’t it. When does seeing become dating? When does dating become exclusive? And, importantly (for asset protection)…when does dating become de facto partners?
From 1 March 2009 it was all a bit confusing (unless you live in South Australia, then it all became confusing from 1 July 2010), when our colleagues down in Canberra decided that parties to a de facto relationship that has broken down can apply to the Family Courts to have their financial matters determined in the same way as married couples.
I often hear people say, “It hasn’t been two years, how can he take my assets?”
Well, it’s not that simple.
One of the questions asked by the Courts is “Are you living together on a genuine domestic basis?”
Let’s look at some of the things that can tick the boxes for this:
- The duration of the relationship;
- The nature and extent of the common residence;
- Whether a sexual relationship exists;
- The degree of financial dependence or interdependence, and any arrangements for financial support;
- The ownership, use, and acquisition of property;
- The degree of mutual commitment to a shared life;
- Whether the relationship is, or was, registered;
- The care and support of children;
- The reputation and public aspects of the relationship.
Further, the Courts need to be satisfied of one of the following:
- The period (or the total of the periods) of the de facto relationship is at least 2 years
- There is a child of the de facto relationship
- One of the partners made substantial financial or non-financial contributions to their property, or as a homemaker or parent, and serious injustice to that partner would result if the order was not made, or
- The de facto relationship has been registered in a State or Territory with laws for registration of such relationships.
There are some exceptions to this; an obvious one is that you can’t be related.
But importantly, it includes same sex couples! “Good on you Australia!”
So, when should you start considering entering into a pre-nuptial agreement (or as Australia likes to call it, a Binding Financial Agreement)? If you’re concerned, we say as soon as possible.
On the other end, should you be making a claim against your ex de facto partner? Do you fall under the definition that allows a Court to make a financial order?
Each relationship is different, so if you have any questions about anything in this article, give us a ring for a friendly confidential chat.