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What you need to know about de facto relationships

Posted on 24 July 2018

It may not sound romantic but moving in with your partner is not just an act of love, but a merging of assets. If things go pear shaped in your relationship, your de facto could be entitled to many of your things – including property.

In Australian law, a de facto is recognised as your partner and is entitled to all the things a married person would be.

But how do you become someone’s de facto? It’s not just moving in together that makes it official.

People often think they wake up and suddenly they’re a de facto, but that’s not the case. It’s about whether you are in a relationship on a genuine domestic basis and that can be broadly interpreted.

Although the definition of a genuine domestic relationship is broad, there are some determining factors which a court may consider when assessing whether or not a couple are in a de facto relationship:

  • The duration of the relationship – generally a relationship that lasts more than two years, although there are exceptions. The longer the relationship, the stronger the argument for proving it a de facto relationship.
  • The nature and extent of common residence – if you cohabited during the course of the relationship, if there was payment of rent by one member of the couple to the other, and if the address of the couple is on official documentation such as licenses and government letters.
  • Whether a sexual relationship exists – as embarrassing as this might be, courts will ask things such as the frequency of a couple’s sexual relationship and the mutual exclusivity of their sexual relationship.
  • The degree of financial dependence or interdependence – is there joint ownership of property, joint bank accounts, health insurance in joint names, payment towards joint mortgage and/or loans, sharing of household and other expenses (which can include groceries), as well as income tax returns of the couple.
  • The ownership, use, and acquisition of their property – couples will be asked if there was joint ownership of real estate (or discussions around purchasing one), if they lived together in a property, if there were payments towards the mortgage of a property owned by one of them, whether they purchased furniture together, or if they were beneficiaries under the couple’s superannuation policies.
  • The degree of mutual commitment to a shared life – this means if you were living together in a common residence and spending regular time together and with friends and family. Conversations and statements made to each other and to others about one another is also assessed.
  • The care and support of children – whether the couple has children together or from other relationships. When a couple has a child together, they automatically become de factos.

So how can you protect both your assets?

Things can get quite nasty when it comes to the end of a relationship.

The best way to ensure you don’t come out of a de facto relationship in a situation you feel you lost in – not only emotionally, but financially – is to sign a Financial Agreement.

It may sound unromantic, but there is another way of viewing it. It’s basically you/your partner saying that you love each other too much to fight and that you aren’t with them for what you might get out of the relationship financially.

Vue Financial

The author is an employee of Vue Financial Pty Ltd, Authorised Representative of Count Financial Limited, AFSL 227232.

Important information:

The information in this article is provided for illustrative purposes only and does not take into consideration your personal circumstances. You are encouraged to seek financial advice suitable to your circumstances to avoid a decision that is not appropriate. Any reference to your actual circumstances is coincidental. Count Financial Limited and its representatives receive fees and brokerage from the provision of financial advice or placement of financial products.

 

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