Top tips to protect your assets in a de facto relationship30-March-2016 Family Law By Simone Green
Couples who decide to move in together and share in one another’s lives need to understand the potential legal ramifications of such a decision. The relationship could now be defined as “de facto” and as such, may incur financial obligations for both parties should they separate in the future.
To protect your assets while in a de facto relationship, it is wise for couples to consider doing the following:
- Draw up a Financial Agreement regarding the assets each has at the beginning of the relationship and how they will divide their property interests in the future should they separate. This is especially important in circumstances where one party has significantly greater assets than his/her partner.
- Should the couple decide not to draw up a legally binding Financial Agreement, they should at a minimum agree to keep all their finances separate. This includes:
- No intermingling of finances
- No joint bank account
- Any acquired property should only be in one party’s name (no joint ownership)
- Each party remains responsible for their own debts
- Each makes their own financial decisions and spends their wages as they choose with no accountability to the other party
- There should be no evidence of intent to provide for the other in a will or as a beneficiary in superannuation funds or life insurance policies (there should be no evidence of financial planning for their future)
- If one party owns the home the couple lives in, the other should be contributing rent/board to cover normal living expenses.
The issues above were considered by the Family Court in the matter of Chancellor & McCoy  FCCA 53 in successfully defending a claim by a de facto partner for an adjustment of property interests; but merely following these guidelines provides no absolute guarantee for those wishing to protect their assets. Streeterlaw strongly recommends that anyone considering entering into a de facto relationship or who may currently be in a de facto relationship enter into a Financial Agreement to avoid the uncertainties of possible later litigation if the relationship ends.