The phrase de facto relationship break up entitlements is used to refer to the assets and property that is distributed following the break down of a de facto relationship. This article aims to explore what the de facto relationship break up entitlements are. Firstly, let’s understand the definition of a de facto relationship.
What Is A De Facto Relationship?
According to Section 4AA of the Family Law Act (1975) there are three points that define the relationship. These include:
- the persons are not legally married to each other;
- the persons are not related by family; and
- they have a relationship as a couple – living together in a genuine domestic basis for two years or longer
In working out if people have a relationship as a “couple”, the Act states the following criteria:
- the duration of the relationship;
- the nature and extent of their common residence;
- whether a sexual relationship exists;
- the degree of mutual commitment to a shared life;
- the ownership, use and acquisition of their property;
- the degree of financial independence, or interdependence, and any arrangements for financial support, between them
- the care and support of children;
- the reputation and public aspects of the relationship; and
- whether the relationship is or was registered under a prescribed law of a state or territory as a prescribed kind of relationship.
For instance, in relation to the last point made above, you can find each state’s online registration on their website. To register your de facto relationship in NSW, click here.
De Facto Relationship Break Up Entitlements
Because the definition is so different to that of a “marriage” or a “married couple”, many people assume that de facto relationship break up entitlements are very different. However, since March 2009, the Family Court has had the power to treat property settlement matters for de facto relationships in the same way as they do for marriages.
In other words, the legal process of distributing or settling property and assets in the event of a breakdown of the de facto relationship is largely similar to the processes involved in divorce or separation cases.
Property Settlement
The only major difference between property settlement in marriages and de facto relationships is the time limitations within which claims can be brought forward. This will be discussed in the section below.
In marriages the time limitation period for finalising property settlement is 12 months (one year) from the date of the divorce order becoming final.
Whereas, according to Section 44 of the Family Law Act (1975) in de facto relationships, the time limitation period is 24 months (two years) from the date of final separation.
After a de facto relationship break up, family lawyers take a few things into consideration while completing property settlement procedures. This section will discuss this in detail by identifying the steps involved to understand how the entitlements are received by each party.
Firstly, the combined asset pool is evaluated by identifying the value of property, any other assets, and superannuation. All these assets minus the liabilities is also called the property pool and can include individual assets, joint assets as well as assets owned jointly with a third party.
What are the things included in property?
- Family home
- Vehicles – cars and boats, etc.
- Household items, and personal items including jewellery, furniture, white goods
- Superannuation
- Business and property investments
- Home loan debts
- Any other personal loan debts, and money owed on credit cards
Secondly, lawyers need to gauge the contributions made by each party. This can include both financial contributions and non-financial contributions. Financial contributions include things like income, inheritance and gifts. Whereas taking care of the household, renovating the household and caring for the children (if children are involved) falls under non-financial contributions.
Case example
In the case of Lee & Hutton [2013] FamCA 745; 50 Fam LR 322, their relationship fell short of the two-year mark by 16 days. There were no children in the relationship either, but there were planned pregnancies which were not successful.
However the application for property settlement was considered as a result of ‘de facto relationship’ break up because of the applicant’s substantial contributions to the family, and in the applicant’s role as an ‘intended parent.’
Thirdly, both the parties’ future needs have to be considered. This could include factors like:
- both the parties’ future earning capacities
- whether any of the parties are eligible to draw down on their superannuation funds
- their physical and mental health
- if there are any serious health issues that might affect their ability to generate stable income
- if there are any children involved
- if so, who is to have primary responsibility of the children
Binding Financial Agreements
BFAs are particularly important to be considered during a de facto relationship break up. Most often, people opt to enter into BFAs at the beginning of their relationship. A family law solicitor usually draws up these agreements.
BFAs provide details on how assets and property are to be divided in case of a de facto relationship break up. This is helpful as it does not cause any delays, in case the relationship breaks down, and property settlement happens faster.
According to the Family Law Act (1975) for a BFA to be legally binding it must:
- have been signed by both parties; and
- see that both parties gain independent legal guidance prior to entering the agreement
JB Solicitors’ Legal Guidance
A de facto relationship break up can get complicated because of the various confusions around the rules of property settlement in such cases. Legal guidance is essential to speed up the process, and prevent unnecessary property disputes.
At JB Solicitors, our expert family lawyers have a wealth of experience in dealing with such property settlement matters. Our lawyers have the expertise of drawing up BFAs, and offering mediation services if conflicts occur. We have fixed-fee pricing for family law.
Contact our friendly and experienced lawyers today.
For more information on a de facto relationship break up entitlements, watch our YouTube video below.
