Just because a couple lives together, does not automatically mean they are in a de facto relationship. There are various factors to consider when determining whether two people are living in a de facto relationship, such as whether they share bank accounts, are in a sexual relationship, and whether they are known as a couple to family and friends.
If you choose to move in with your partner to become ’de factos’, you should understand your rights and responsibilities under de facto relationship laws.
What is a de facto relationship?
Contrary to public opinion, there is no set time period that a couple needs to be living together before they can be considered to be in a de facto relationship. However, to be recognised as a ’de facto couple’ and have the same legal rights as a married couple, the Family Law Act generally requires couples to have been living together on a genuine domestic basis for at least two years or have at least one child from the relationship.
There is no one-size-fits-all checklist of factors to prove that a couple is living in a de facto relationship. Rather, various factors can be taken into consideration, including:
- Are the couple living together and, if so, for how long have they been living together?
- Whether the couple has a sexual/intimate relationship.
- Whether they share joint bank accounts or property.
- Whether they share weekly living costs, such as utility bills.
- Whether their family and friends know them as a couple.
- Whether they share any children.
How do I protect my assets if I am in a de facto relationship?
To help protect assets, a couple might consider entering into a financial agreement (often referred to as a ‘pre-nup’ or ‘binding financial agreement’). A financial agreement sets out the assets each party has at the beginning of the relationship and stipulates how these assets will be divided if the couple separates.
Strict processes must be followed when making a financial agreement. The agreement must be drafted according to specific requirements and each party must receive independent legal advice. There is also a risk that the financial agreement could be set aside (voided) by a court post-separation. Your lawyer can advise you about the applicable law and the risk factors relating to financial agreements later being voided.
If a de facto couple decides not to draw up a financial agreement, they can, as a minimum, agree to keep their finances separate. This may look like:
- Keeping finances and bank accounts separate.
- No joint ownership of any property acquired.
- Each party remains responsible for their own debts, makes their own financial decisions and spends their money as they wish, with no accountability to the other party.
- Not making financial plans for the couple’s future. There should be no evidence of an intention to provide for the other party in a Will, as a beneficiary in a superannuation fund, or life insurance policy.
- If one party owns the home where the couple resides, the other party could contribute rent/board.
To help protect your assets in the event that your de facto relationship breaks down, we recommend you seek legal advice from an experienced lawyer.
How does the law treat a de facto relationship?
If a couple separates and a de facto relationship is recognised under family law legislation, the parties may apply to the court for orders about how their assets and liabilities should be divided. The party making the application must generally prove that a de facto relationship existed for at least two years. However, there are some exceptions to this two-year requirement, such as:
- the de facto couple share a child
- one party made substantial contributions to the assets of the relationship and it would otherwise be unfair not to make orders
Orders sought for financial matters can include:
- property settlements
- spousal maintenance matters
- superannuation splits
There is a time limit of two years from the date of separation to make a property claim.
Conclusion
De facto couples generally have the same legal rights as married couples under the Family Law Act, and there is no one-size-fits-all checklist of factors to prove that a couple is living in a de facto relationship. Rather, various factors are considered.
If you and your partner plan to move in together, it is important to understand the potential implications under the laws relating to de facto relationships.
This is general information only and does not constitute legal advice. We recommend you obtain professional advice relevant to your individual circumstances. If you or someone you know wants more information or legal advice, please call 03 5747 8251 or email mi*****@********om.au.