De facto relationships are common in Australia. A key question arises when they end: How is property divided? This guide explains property division for de facto partners.
Understanding De Facto Relationships
A de facto relationship means two people live together as a couple without marriage. This includes opposite-sex and same-sex couples. The relationship usually lasts at least two years. Exceptions exist, like having children together.
Legal Recognition
The Family Law Act 1975 recognises de facto relationships. Property division often follows the same rules as for married couples after separation.
What Counts as Property?
“Property” means all valuable items owned by partners. It includes:
- Real estate
- Cars
- Bank accounts
- Investments
- Superannuation (retirement savings)
- Personal belongings like jewellery
Joint and Separate Property
Property can be joint (owned together) or separate (owned individually). Names on ownership documents matter less during division. Courts examine the entire situation.
How Is Property Divided?
Property division follows specific steps:
Step 1: Identify Property and Debts
List all assets and debts. Include jointly owned items and separately owned items.
Step 2: Assess Contributions
Evaluate each person’s contributions. Financial contributions count. Non-financial contributions also count. Examples include homemaking and childcare.
Step 3: Consider Future Needs
Examine each person’s future needs. Factors include age, health, and earning capacity. Greater future need can affect the division outcome.
Step 4: Achieve a Fair Outcome
The court aims for a fair result. This is not always an equal split. Fairness depends on all circumstances.
Consent Orders and Binding Financial Agreements
Couples can sometimes agree without court. They use two main tools:
- Consent Orders: A written agreement approved by the court. This saves time and reduces stress.
- Binding Financial Agreement (BFA): Similar to a prenuptial agreement. It sets out asset division if the relationship ends. Get legal advice to ensure a BFA is valid and fair.
What If We Can’t Agree?
Court may be necessary if agreement fails. The court uses the four steps to divide assets. Court action is costly and stressful. It is usually a last option.
Important Considerations
Time Limits
Apply for property division within two years of separation. Missing this deadline makes claiming assets harder.
Legal Advice
Seek legal advice about de facto property division. A lawyer explains your rights and options.
Conclusion
De facto property division can be complex. Understanding the process helps. Courts or agreements aim for a fair outcome. Legal advice assists this journey. Knowing your rights helps you make good decisions for your future.