De Facto Separation

De Facto Lawyers in Melbourne

One of the difficulties in defining a de facto relationship is that every relationship is unique, just like marriages or any intimate relationship. De facto relationships can cause more confusion legally, though, because there is less information available comparatively.

There are many people who are in a de facto relationship without realising it. In some instances, people mistakenly think that being in a de facto relationship has given them property rights after a breakup that may not, in fact, exist. Whatever the case, if you are sharing a home with someone you are in a relationship with, it’s good to be clear about the laws that may affect you if a breakup occurs.

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What is a De Facto Relationship?

If you live with another person, on a genuine domestic basis as a couple, and are not married, your relationship will be defined as de facto.

In deciding if the parties are in a de facto relationship, the court looks at all the circumstances of the relationship, but particularly at:

  • How long you have been together

  • The circumstances of your relationship

  • If a sexually intimate relationship is present

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  • The degree of financial dependence or interdependence, and any arrangements for financial support, between them;
  • The ownership, use and acquisition of their property;
  • The degree of mutual commitment to a shared life;
  • Whether the relationship is or was registered under State or Territory law as a prescribed kind of relationship;
  • The care and support of the children; and
  • The reputation and public aspects of the relationship.

A de facto relationship can exist even if:

  • The parties live in separate towns, cities or even countries;
  • The relationship is not exclusive;
  • The couple does not live together full-time;
  • There is no sexual relationship; or
  • One person is legally married to someone else or in another de facto relationship

Each case is decided on its facts.  Some facts may indicate a de facto relationship existed and others may indicate that it did not.  There may also be contradictory indications that the de facto relationship started or ended at a particular time. It is the whole picture which must be considered and attributing greater importance to certain factors is not helpful as every relationship is different.

De Facto Relationship Property Rights

1. It is essential to take into account both partners’ current interests in all assets, debts, and financial resources when calculating the “net asset pool” that will be divided. If you have difficulty reaching an agreement about the value of a particular asset with your former spouse or partner, it may be beneficial to ask for assistance from an expert.

2. It then needs to be determined if the division of the property pool is just and equitable (fair) before any split of assets is actioned. In some cases, each individual will keep the assets they have, and in other cases, an adjustment will be made on behalf of each party via binding financial orders.

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3. If a just and equitable property settlement is to be made, it’s important to consider the contributions each party has made during their relationship and since separation. These include:

  • All financial contributions made by either party or on their behalf, including those at the commencement of the relationship, should be taken into consideration. Wages, presents and inheritances are especially significant in this regard. Additionally, any existing property owned prior to the relationship must also be noted.
  • Non-monetary contributions made by both parties, or on behalf of them like taking on responsibilities as a homemaker or parent, and any home improvements, are also considered.

4. When determining the post-separation circumstances and ongoing requirements of each party, it’s important to take into consideration a number of factors such as:

  • The health and age of each party
  • If one spouse or both have custody over children from the relationship
  • Earnings, future job opportunities and potential income of both parties

All of these aspects markedly influence the division of assets.

5. The court ensures that the ruling is just and appropriate, taking into consideration all factors of the specific case. If not already determined in a prior stage, whether there must be a division of superannuation or how much should be split may also become an issue at this point.

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Frequently Asked Questions

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What is a de facto relationship?

One of the difficulties in defining a de facto relationship is that every de facto relationship, like every married relationship, is very different. 

Many people are in a de facto relationship but don’t realise that they are, and there are often people who mistakenly believe that their de facto relationship gives them property rights against their partner.

It need not be an exclusive relationship, and can exist even if one person is legally married to someone else or in a concurrent de facto relationship.

The definition of a de facto relationship is simply when two individuals are living together on a basis that is considered a genuine domestic situation.

To be in a de facto relationship:

  • You cannot be legally married to each other;
  • You cannot be related.

For the Family Law Act 1975 to apply to disputes about property and spousal maintenance following the breakdown of your relationship, you must have been living together for at least two years. If you don’t meet this requirement, the Act may still apply if one or more of the following conditions are met:

  • One party made substantial contributions and a failure to make an order which recognises those contributions will result in a serious injustice;
  • The couple share a child or children, or;
  • The relationship has been registered by law in an Australian territory or state.

Factors taken into account when defining a de facto relationship include:

(a) the length of the relationship;

(b) the extent and nature of their shared residence;

(c) if an intimate or sexual relationship is present;

(d) what the financial arrangements both parties consist of, and if there are any financial support arrangements in place, or if financial interdependence or dependence exists ;

(e) how property is owned, used and has been acquired ;

(f) the level of commitment from both parties regarding a shared life

(g) if the relationship has been registered at any time under relevant Australian laws as a prescribed kind of relationship;

(h) how children are cared for and supported; and

(i) the public reputation of the relationship.

What is the timeframe for living together before being considered as having a de facto relationship?
Despite popular beliefs, there is no ‘magic’ number that defines when de facto relationships become official. Many people say it’s six months or two years, but this isn’t actually correct.

How long a de facto relationship lasted is just one of the factors that will be considered if a legal matter arises. Your particular circumstances will be assessed, and it must be shown that there was a mutual commitment and that you were living together on a genuine domestic basis.

After a timeframe of two years, you may apply to the Federal Circuit Court for property orders to be made, but this doesn’t mean they will be granted. Many aspects of a relationship will be considered. Even if you’ve had a shorter relationship, you may still be able to apply for property settlement, especially if there are children involved, or you have made contributions that are deemed significant.

When can a de facto party make a property or maintenance claim?
The existence of a de facto relationship in itself doesn’t automatically entitle a former partner, or current de facto partner, to anything in a property settlement agreement. Family law courts take a number of factors into account, such as:

How long you were together

If you had any children together

That the person making the claim contributed to the relationship substantially, whether financially or otherwise. This includes earning a wage, home duties, bringing property into the relationship, raising a child, business income and inheritances.

If the result of not making a financial order would create a serious injustice to the party applying

If the relationship is or was ever registered under a prescribed law of a State or Territory.  

There are time limits that apply to making a claim too, which means that any requests to divide property or assets must be made within 2 years of a de facto separation.

If you live in Western Australia, you will need to apply to the Family Court of Western Australia. Anywhere else in Australia, you will need to make a claim through the Federal Circuit and Family Court of Australia. 

What am I entitled to after the breakdown of a de facto relationship?

You may be entitled to a property settlement or maintenance. Maintenance is usually only ordered for a short time before property orders are made or implemented. De facto partners have the same rights as married couples provided they meet the definition of a de facto relationship and the requirements to enable an application to be made.

How are disputes between de facto couples resolved?
Most couples negotiate a settlement and enter into consent orders. Family dispute resolution and mediation are useful to assist parties with this. If they can’t agree, all parenting and most property settlement disputes are resolved in the same way as disputes between legally married couples – in the Federal Circuit and Family Court of Australia. In Western Australia, they are resolved by the Family Court of Western Australia Very rarely, property disputes between de facto couples are resolved under State or Territory law.
What am I entitled to in a de facto relationship?

There is no fixed formula for working out how property is divided after the breakdown of a de facto relationship. The factors that need to be taken into account include:

  • Whether it is just and equitable to make property orders
  • The contributions of each party. These can be financial, non-financial, homemaking or parenting
  • Other factors such as incomes, future earning capacities and the care of children

We can advise you about how the law will apply in your case and the range of results you can expect.

What happens when a de facto relationship ends?

No formal document is required or available to prove that the de facto relationship has ended.

Parties usually resolve parenting and property issues by consent with the assistance of a family dispute resolution practitioner, mediator or lawyer. This agreement is usually documented in court orders. If they can’t agree, then one party may initiate court proceedings.

What are de facto relationship property rights?

De facto partners have the same rights as married couples provided they meet the definition of a de facto relationship and the requirements for an application to be made.

How do assets get split when a de facto relationship ends?

To determine how property division will occur, the following steps will occur:

1. All assets, financial resources and liabilities are identified, to create a ‘new asset pool’. If there are items that you and your ex-partner are unable to agree on a value for, an independent valuation may be required.

2. It will need to be determined if it is equitable (fair) for an adjustment to be made in favour of either party, which is determined by criteria that the court defines.

3. If it is deemed to be fair to split the property in a certain way, a binding financial agreement with be drawn up. The following factors will be considered:

What financial contributions both parties made during the relationship. This will include everything from daily living arrangements to major purchases. It will also consider who owned what at the start of the relationship and if either party has significant debts. Wages, inheritances and gifts during the relationship are also looked at closely.

What both parties contributed in non-financial ways, or what others may have contributed on their behalf. This can include caring for a child, housework, running a business or home maintenance and renovations

Consider the short terms and long-term needs of both parties after separating, such as:

  • How old both parties are, and what their health is like
  • If there are children, who will have care
  • How much both parties earn
  • What future employment opportunities and earning ability both parties will likely have

These factors can significantly play a part in the outcome of court proceedings.

The court will then assess if the outcome is fair, or appropriate, after considering the many variables at hand. There may also be a superannuation split at this stage of proceedings if not accounted for prior.

What property is included for division between a de facto couple?

When negotiating property splits, all types of property, and interests in them, are considered. This includes:

  • Real estate
  • Businesses
  • Partnerships, trusts and private companies
  • Shares and other investments
  • Bank accounts
  • Art, wine collections and jewellery
  • Household belongings, and furniture
  • Cars, boats, caravans and motorbikes
  • Assets that are overseas
  • Debts – both parties’ debts will be considered as part of the asset pool

It doesn’t matter if assets are joined jointly, individually, or with third parties, they will be assessed.

In some instances, if one party controls a property, even if they don’t own it, this may be divided in a property settlement. This includes assets that may have been transferred to someone else, or family trust assets.

Inheritances that are expected are rarely considered property, but may still be assessed as a part of an individual’s long-term ability to manage financially. They are often seen as a ‘financial resource’, the same way that long service leave or other owed payments, such as outstanding loans or royalties may be.

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