Beyond the Breakup: Navigating De Facto Relationships

When your de facto relationship breaks down, things can quickly become messy and complicated between you and your ex-partner. And it may appear that without the legal framework of marriage, the division of assets, future financial support and other matters is difficult to resolve. However, we give tips below to help you:

1. recognise when you are in or entering into a de facto relationship;
2. put measures in place for the protection of your assets and future financial support in the event of the breakdown of your relationship; and
3. understand your rights in applying for a property settlement in the Federal Circuit and Family Court of Australia in the event your de facto relationship breaks down.

How do you know if you’re in a de facto relationship?

As discussed in one of our previous articles, section 4AA of the Family Law Act 1975 (Cth) (the Act) provides that you may be in a de facto relationship with another person if:

• you are not legally married to that person; and
• you are not related to that person by family; and
• having regard to all the circumstances of your relationship, you have a relationship as a couple living together on a genuine domestic basis.

In working out whether you have a relationship as a couple, the Court can consider all or any of the following circumstances:

1. the duration of your relationship;
2. the nature and extent of your common residence;
3. whether a sexual relationship exists;
4. the degree of financial dependence or interdependence and any arrangements for financial support, between you both;
5. the ownership, use and acquisition of property between you both;
6. the degree of mutual commitment to a shared life;
7. whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
8. the care and support of children;
9. the reputation and public aspects of the relationship.

It is important to note that none of the factors mentioned above are obligatory requirements and the Court may also take into account additional factors.

Significantly, even if you are not residing in the same residence as the other person, having regard to the factors above and any additional factors, you may nonetheless be in a de facto relationship for the purposes of the Act.

How do you know once your de facto relationship has ended?

If you are in a de facto relationship, how do you know when that relationship breaks down?

Ending a de facto relationship can require more than just physical separation. Below are some ways you can recognise when your relationship has broken down or some measures you can take to indicate your intention to separate from your partner:

1. Take time to reflect on your feelings. Assess whether you have decided to end the relationship completely.
2. Select an appropriate time and place to communicate your intention to separate from your partner. Communicating your intention can prevent any future misunderstanding between you. If you feel unsafe communicating your intention to separate from your partner, you could arrange for this conversation to take place in a public place or with friends or family close by.
3. Establish separate living arrangements. Even though you and your partner may have separated, it is not always possible to secure separate accommodation. If this is the case, you and your partner will need to establish separate spaces within your shared environment. This should include having separate bedrooms, conducting your own household tasks like cooking and laundry and maintaining individual routines.
4. Present yourself independently. Once you feel comfortable with your separation, you should communicate it to those friends and family that you choose. You should avoid attending social events with your former partner or engaging in activities with them. You want to avoid presenting as a couple to others.

How long do you have to make an application to the Court for property settlement after the breakdown of your de facto relationship?

Once your de facto relationship has broken down, you have two years to commence proceedings in the Federal Circuit and Family Court of Australia for a property settlement. While it is possible to seek leave from the Court to commence proceedings out of time, this is not guaranteed and can become an expensive process.

To make an application for property settlement in the Court, one of the following conditions must be satisfied:

1. the relationship must have existed for at least two years, or
2. there is a child of the relationship, or
3. one of the partners has made substantial financial or non-financial contributions to their property or as homemaker or parent, and serious injustice would result to that partner if an order was not made, or
4. the de facto relationship has been registered in a State or Territory under laws for the registration of relationships.

Please contact us if your relationship has broken down so that you can receive tailored advice about the limitation period and requirements for commencing proceedings.

How can you protect yourself in the event of a de facto relationship breakdown?

There are ways you can protect yourself and your financial affairs in the unfortunate event that your de facto relationship breaks down.

Whether you are entering a de facto relationship, already in a de facto relationship or your relationship is breaking down, you should consider the following points:

1. Financial awareness: stay informed of your financial circumstances. Know which banks your accounts are with, your superannuation account details and your life insurance policies. Keep records of important documents like loan agreements, tax returns and property deeds.
2. Separate finances: consider keeping your finances separate from your partner or having minimal joint bank accounts and credit cards between you both. This will help provide a distinction between your joint and personal finances.
3. Financial independence: if possible, maintain a separate source of income from your partner. Build your personal savings.
4. Documentation: be financially transparent with your partner. Keep records of significant transactions, joint expenses, debts and any financial contributions made during the relationship. Document any loan agreements or financial arrangements between you and your partner. If you are early into your de facto relationship, write down a list of the assets, liabilities and superannuation you both own at the date you begin living together.
5. Financial Agreement: consider entering into a legally binding financial agreement with your partner which will determine how your assets and liabilities will be divided in the event of a separation. Financial Agreements can also assist in protecting any inheritances you receive or significant financial assets you bring into a relationship. your pre-existing assets and inheritances. However, there are legal requirements that need to be met for a Financial Agreement to be valid and enforceable, one being that each party will need to seek independent legal advice. We can provide you with further information on financial agreements and assist in preparing this document for you.
6. Estate planning: consider creating or updating your Will to ensure your assets are distributed to the beneficiaries you nominate. Also consider updating your Power of Attorney and Enduring Guardian documents to make sure that someone you trust can make financial, medical and lifestyle decisions on your behalf should it become necessary in the future.
7. Superannuation and insurance coverage: review your policies and update your nominated beneficiaries accordingly.
8. Seek professional advice: seek advice from a solicitor, financial advisor or accountant to understand your financial situation, asset protection and the implications of a relationship breakdown.

Please don’t hesitate to get in contact with the team at Cheney Suthers if you need advice or clarification on any of the points raised above.