How do you split property in a de facto relationship?

A de facto relationship, in legal terms, refers to a relationship between two adults who live together as a couple on a genuine domestic basis, but aren't formally married. This type of relationship carries with it certain rights and obligations, similar to those in a marriage. One of these obligations pertains to property division when the relationship ends. Being aware of these implications is crucial to protect your rights and ensure a fair division.

Even though a de facto relationship isn't a formal marriage, it doesn't negate your entitlement to a fair share of jointly owned property. The Family Law Act covers property rights for de facto couples. treating them in a way similar to formally married couples. It means the court considers many of the same factors when dividing assets amongst de facto couples, just as it does for married ones.

In order to avoid potential disputes over property division, some couples choose to enter into a Binding Financial Agreement (BFA), also known as a 'pre-nup'. BFAs specify how the property would be divided should the relationship end.

BFAs provide a level of certainty and can greatly reduce the stress, cost, and conflict associated with property division. However, it's crucial that both parties thoroughly comprehend their rights and obligations under such an agreement. A BFA can cover a wide array of matters, not just physical assets, but also financial resources, spousal maintenance, and superannuation, among others.

Before entering into a BFA, obtaining independent legal advice is crucial. A family lawyer can guide you through the process, explaining the complexities of the agreement and ensuring that it is in line with your best interests. By taking this step, you can make informed decisions and protect your rights, ensuring that the BFA serves as a protective measure rather than a source of potential future dispute.

In addition to BFAs, Consent Orders are another useful legal tool for managing the division of property in a de facto relationship. These are essentially written agreements drafted upon mutual consent that are approved by a court and have the same legal effect as a court order. Similar to BFAs, Consent Orders will also provide certainty regarding the distribution of property should the relationship come to a close.

One major advantage of Consent Orders is that they provide certainty and finality. Once entered, they are very difficult to overturn unless there has been a significant change in circumstances, non-disclosure of a relevant matter, or in the case of fraud.

If parties cannot amicably settle their property disputes through negotiation or mediation, court litigation may be their final resort. However, given that court intervention is often more costly, time-consuming, and emotionally challenging, it's typically considered the last option after all other methods have been exhausted. Ideally, resolution should be sought through peaceful negotiation or mediation, which allows for open dialogue and mutual agreement, often resulting in less stress and more satisfactory outcomes. Hence, it is beneficial to consider all possible alternatives before resorting to this course of action.

1. Financial Contributions: This encompasses the direct financial inputs by both parties during the relationship. It's not just about salaries or wages earned, but also assets that either party may have brought into the relationship. These can include property, inheritance, or investments. Financial contributions may also encompass liabilities, such as loans or mortgages, that were taken on during the relationship.

2. Non-Financial Contributions: These are contributions that, while not monetary, have substantial value within the relationship and contribute to the overall wealth and lifestyle enjoyed by the couple. Examples include homemaking and parenting duties. This could involve everything from daily chores and home maintenance to child rearing and supporting the other partner's career. Courts recognize these as valuable inputs that contribute significantly to the relationship.

3. Future Needs: A fair property settlement must also consider the future needs of each party. This includes an array of factors such as:

   • Age and health: Older individuals or those with health issues may find it more challenging to become financially stable after separation, and this is taken into account.

   • Financial resources: This considers any financial resources that each party has access to, such as income from employment, rental income from properties, or dividends from investments.

   • Employment capacity: This evaluates each party's ability to gain meaningful employment, considering factors like age, health, skills, qualifications, and the current job market.

   • Care of children: If one party has the primary responsibility for caring for children from the relationship, this can impact their ability to work and earn an income, and it's a crucial factor in property division.

The key goal is to achieve an outcome that is 'just and equitable' - a split that is deemed to be fair and balanced, taking into consideration the unique circumstances of both parties involved.

This is where professional legal advice becomes invaluable. Experienced family lawyers can guide you through the process, ensure your rights are protected, and help you achieve the best possible outcome.

It's essential to remember that you do have rights and that there are professionals who stand ready to support you during this demanding period. It's crucial to remember that every de facto relationship is unique, and what works for one couple may not necessarily work for another. Therefore, bespoke professional advice is paramount.

At MJ Legal, our professional family law team is committed in protecting your rights. and we aim to ensure that your rights are upheld, guiding you towards the most beneficial outcome during this challenging transition.