How to avoid the financial risks of a de facto relationship

7-January-2013 Family Law By admin

With more people these days choosing not to marry, or living together first to see how things work out, the legal rights of both parties are often misunderstood.

In the past, a de facto relationship was commonly believed to be a marriage-like relationship of more than two years cohabitation. Some partners may be lulled into a false sense of security believing they have two years before their de facto partner can make a claim if things go wrong.  

The Family Law Act was amended to bring de facto relationships under the Commonwealth jurisdiction. A de facto relationship is now considered to be one where the parties are not legally married, not related by family and having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.

A de facto relationship can now include same sex partners and can even be characterised when one of the parties is legally married to another.  

How a court determines what constitutes a de facto relationship is dependent on a number of factors such as:

  1. The duration of the relationship
  2. The nature and extent of their common residence
  3. Whether a sexual relationship exists
  4. The degree of financial dependence and support
  5. Ownership, use and acquisition of property
  6. Degree of mutual commitment to shared life
  7. The care and support of children  
  8. Reputation and public aspects of the relationship.

Sydney lawyer Mark Streeter, principal at Streeterlaw, says it is important people know that the Court uses discretion when examining a de facto relationship and assigning the ownership and distribution of assets from a broken relationship.

“It is no longer technically necessary for parties to be living together for a period of two years to be classed as a de facto couple,” Mr Streeter said.

“We recommend that parties who do not wish to be treated in the same way as married couples – in respect to their finances and property – enter into a Binding Financial Agreement to clearly set out the division of property should the relationship break down.”

For more information or to discuss how to set up a Binding Financial Agreement, please contact Simone Green, Principal Solicitor at Sydney law firm Streeterlaw, on {module_contentholder,46501} or by email at

Found this article useful? Feel free to share it!

Book a Case Appraisal!

Tell us what event has happened, what date did it happen, who is your matter in relation to… .etc

* Required