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Don’t find out too late you and your partner are de facto

Don’t find out too late you and your partner are de facto

Don’t find out too late you and your partner are de facto

Most people, even many lawyers, think that for someone to claim a share of your assets you need to be either married, or live together for two years.

But imagine splitting up with your ex-girlfriend, or boyfriend, before the two-year period ends, only to have them come back and claim a share of what you own.

That was the scenario which played out for an Australian woman when she was told by the family law court she had been living in a de facto relationship – despite the fact she’d only been living with the partner in question for 18 months – not the full two-year period stated in the Family Law Act.

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The reason was that 10 years earlier the same-sex couple had spent four years living together and the court found it had to take into account the total amount of time they had spent together, not simply the length of the most recent stint.

The woman had even had another de facto partner in the 10 years they had been apart, but the Full Family Court of Australia found this didn’t matter because of the way the relevant legislation was worded.

Section 90SB of the Family Law Act states a couple has been living in a de-facto relationship if: “the period, or the total of the periods, of the de facto relationship is at least two years.”

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The words: “or the total of the periods” were held by the court to mean it couldn’t legally ignore the earlier time the couple had spent living together and it was open to the other woman in the relationship to chase her ex-partner’s assets in the courts.

In another judgment a man who stayed with a woman just three days a week was found to be living with her in a de facto relationship – despite not living in their apartment full-time.

In that, North Queensland based, case the court’s judgment noted the man involved had contributed more than $1 million to buying an apartment the couple shared and he kept an electric toothbrush, shaving equipment and most of his business clothes at the residence in question.

Other facts, specifically that the couple were together at significant family occasions like Christmas and New Year and that he had paid the majority of the mortgage on the apartment they were sharing, contributed to the decision that a de facto relationship was in place.

They had also been living under the arrangement in question for many years.

Key family lawyer at Strategic Lawyers, Robert Ballais, said subjectivity around when a de facto relationship was in place was an important reason for people to see a lawyer and get a binding financial agreement when they start living together – not just when they get married.

“Sometimes in cases like this a couple can break-up and one half moves-on with someone else and then the new couple buy a house together,” Mr Ballais said.

“But if there’s no property settlement in place with the ex, that new house becomes part of the property-pool and the new couple can end up being forced to sell the house they’ve bought, in order to pay the settlement.

“You often hear people say a binding financial agreement – what Americans call a pre-nuptial – isn’t worth the paper it is written on.

“That’s simply not true; they are a powerful legal document and while the courts will take into account the share of assets a person brings into a relationship at the beginning, the share people with substantial assets will get is almost certainly less than if they had a legal agreement in place at the start.”

Under Australian law both de facto and married couples have two years from the date of separation to reach a settlement, or get a court order, on the division of their assets.

“However, the courts have set the bar quite low for people applying to get a settlement outside of the two year period, meaning in some cases people who thought they could move on with their lives unexpectedly found themselves involved in a costly dispute with their ex,” Mr Ballais said.

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