Since 2009, the Family Law Act has applied to property disputes between de facto couples including same-sex de facto couples. This has led to a raft of enquiries to family lawyers from clients who are in, or contemplating entering into, a relationship. Common questions include:
- How do I know whether I am in a de facto relationship or not?
- How long do I have to be in a de facto relationship before the law applies to me?
- We don’t have a joint bank account, are we in a de facto relationship?
- What can I do to protect myself from a claim by my partner?
- Will my de facto get half of everything I own if we split up?
The answers to these questions, unfortunately, are full of uncertainty.
You will be regarded as in a de facto relationship with another person if you can be said to ‘have a relationship as a couple living together on a genuine domestic basis’.
In most cases, it is relatively clear whether or not this is the case, but in some cases it is not.
For example, if enough other factors are present, you can be in a de facto relationship even if you are not living in the same house all of the time or even if you are not having sex with the other person.
There have been cases where a person who has claimed the single rate of a social security payment has nonetheless been able to establish to a Court that they were in a de facto relationship at the time (although they are clearly at risk of being prosecuted in relation to their representations to Centrelink in such a case). It is quite common for people who do not have any joint bank accounts or joint property to be found to have been in a de facto relationship. In other words, you are at some risk of being found to be in a de facto relationship without knowing it.
In general, you have to be in a de facto relationship for a minimum of two years before the Family Law Act applies to you. But even that is not fixed and certain. If one of you has made significant contributions, or if you have a child together, the two year minimum does not apply.
If you are concerned about a potential claim being made against you, you can enter into a Binding Financial Agreement (also known as a BFA) with the other person, which sets out what will happen in the event that you separate. Such an agreement can effectively quarantine your property from a claim. There is, however, significant cost associated with entering into such an agreement. It must be drafted to ensure that it complies with the numerous technical requirements of the Family Law Act, furthermore both parties must receive (usually written) independent legal advice. One lawyer or law firm cannot advise both of you. For these reasons, it would not be unusual for parties to spend up to $5,000 each for a relatively straightforward BFA, and much more for a complex agreement.
And even if you have a BFA, there is a risk that it may be set aside or not be valid for some reason. In particular, if a child is born after the parents enter into a BFA, an agreement which does not provide appropriately for the child’s primary carer, is vulnerable to being set aside. That risk can be reduced by making appropriate provision in the event of the birth of a child. In any case, a BFA makes it less likely that a successful claim will be made in terms other than those agreed on separation, although again, that cannot be guaranteed.
Finally, clients often assume that once they have entered into a de facto relationship, property will be divided 50/50 on separation unless they have a BFA providing otherwise. There is no such rule or guideline. What each party will receive depends upon their contributions and future financial circumstances. So, a person who brings most of the property in to a de facto relationship will receive considerable credit for that when the other person’s entitlement is determined, more so the shorter the period that the relationship lasts.
As family lawyers we are experienced in providing advice to our clients to help them manage uncertainty and unpredictability.
Juliet Behrens is Lawyer at Dobinson Davey Clifford Simpson Family Law Specialists, 18 Kendall Lane, New Acton, Canberra ACT 2601 and can be contacted on (02) 6212 7600.