Property Settlement - De Facto Relationship
What happens to property owned when people are de facto?
What is a De Facto Relationship?
A de facto relationship can exist between two persons of different sexes. A de facto relationship can exist between two persons of the same sex. A person can be in a de facto relationship even though they are legally married to someone else or they are in a de facto relationship with another person.
What's the significance of 1 March 2009?
For people in de facto relationships the date of separation is very important because it determines which Act applies.
Read more about this below.
If your relationship breaks down, you may be able to sort out what to do with the property of the relationship in a friendly way with your partner.
Alternatively, you may need assistance to reach agreement. Your solicitor may help you negotiate a settlement with your spouse. Often mediation can help. At mediation you are assisted by an independent person to reach agreement about the division of your property.
If a settlement is reached it should be formalised. That can be done by Consent Orders made by the appropriate Court or by a formal Agreement (Termination Agreement if separation prior to 1 March 2009 and Financial Agreement if separation on or after 1 March 2009). Consent Orders and formal Agreements provide finality so that neither party can make a future claim. They also provide exemption from stamp duty for assets transferred pursuant to the Order or Agreement.
In fact, people can enter into a Financial Agreement before they enter into a de facto relationship or during the de facto relationship (while they are happily together). Such agreements provide for what happens regarding division of property should they separate. These agreements are binding (provided that they meet the conditions set out in the Family Law Act).
Going to Court
If agreement can’t be reached then the matter will go to court.
If you separated before 1 March 2009 then your case will be heard in one of the Local Court, District Court or Supreme Court (unless both parties agree to it being heard in the Family Court or Federal Magistrates Court).
If you separated on or after 1 March 2009 then your case will be heard in the Family Court or Federal Magistrates Court.
Whichever Act is relevant, a court will normally only make a property settlement order if the de facto relationship has lasted for two years or more. There are exceptions e.g. if there is a child of the relationship. Also, regardless of which Act is relevant, court proceedings need to be commenced within two years of the date of separation. Outside of this period special leave needs to be obtained from the court to proceed with the case.
Dividing Property - separation on or after 1 March 2009
The law sets out four steps in determining an appropriate division of property. Those steps are:
Dividing Property - Separation before 1 March 2009
If you separated before 1 March 2009 then steps 1, 2 and 4, outlined in “Dividing Property - Separation on or after 1 March 2009” apply. Little consideration is given to Step 3. So, for example, the arrangement for the care of the children will have much less relevance if you separated before 1 March 2009.
Also, if you separated before 1 March 2009, superannuation cannot be split (unless both parties consent to the matter being dealt with under the Family Law Act by the Family Court or Federal Magistrates Court). It is, however, still taken into account in dividing up the other property.
If you separated on or after 1 March 2009 then to be eligible for spousal maintenance you need to show:
You must apply for spousal maintenance within 2 years of separation (if you are late you have to get permission from the Court to commence your case).
If you separated before 1 March 2009 spousal maintenance can be obtained, but on a more restricted basis.
What is the first step?
We understand that commencing a property settlement is a difficult decision for both parties. It's an emotional time for everyone involved and the complexities surrounding dividing assets can be daunting. For these reasons we designed a 'First Step Package' (FSP) for those taking their first steps in family law.
The FSP is a fixed-cost consultation with one of our highly experienced family lawyers for up to two hours. For your convenience we offer the FSP in three different ways:
During the FSP your lawyer will:
Following the FSP you'll receive a written report about your situation, which will outline what was discussed (above) and provide you with recommendations on the next steps you should take. You'll also receive a free information pack that will be tailored to your situation.
To find out more click this link: First Step Package