The law relating to the division of property between married couples and those in a de-facto or domestic relationship is basically the same, except that there are requirements for qualifying as a de-facto relationship.
What is the legal definition of a de-facto relationship?
Section 4AA(1) of the Family Law Act states that a person is in a de-facto relationship with another if those persons are not legally married to each other, they are not related by family, but having regard to all of the circumstances of their relationship, they have a relationship as a couple, living together on a genuine domestic basis.
Section 4AA(2) of the Act goes on to list the circumstances which may give rise to a domestic relationship, including the duration of the relationship, the nature and extent of their common residence, whether a sexual relationship exists, the degree of financial dependence or inter dependence, any arrangements for financial support between them, the ownership, use and acquisition of their property, the degree of mutual commitment to a shared life, the care and support of children and the reputation and public aspects of their relationship.
The Act goes on, at Section 4AA(3), to say that no particular finding in relation to any of the above circumstances is to be regarded as necessary in deciding whether the persons have a de-facto relationship.
Section 4AA(5) makes it clear that a de-facto relationship can exist between two persons of different sexes as well as between two persons of the same sex.
When can a de-facto partner make a claim on spousal maintenance or property?
The Family Law Act, not being well known for setting out its contents in an orderly fashion, then moves on to Section 90SB, which sets out the requirements before a property or spousal maintenance order can be made in relation to a de-facto relationship.
The more important aspects of that Section are:
(a) That the period or the total of the periods of the relationship is at least two years; or
(b) That there is child of the de-facto relationship; or
(c) That a party to the de-facto relationship has made substantial financial or non-financial or parenting or homemaker contributions to the relationship, and the failure to make an order would result in serious injustice to the person applying for the order or, alternatively, one or both of the parties has registered the relationship under the relevant State or Territory law.
What is the difference between marriage and de-factor relationships?
The most significant fundamental difference between a marriage and a de-facto relationship, for the purpose of making property or spousal maintenance orders after the relationship has broken down, is that the two year time limit and the child qualifications do not apply to married couples.
Proving a de-facto relationship
The most difficult area of this part of the law is determining whether or not the relationship lasted for two years or, if it did not, that there were contributions of the type set out above or that serious injustice would apply to the applicant if the relationship was not recognised.
Most commonly, clients in a de-facto relationship come to us uncertain as to the date that the relationship began and/or ended. Of course, in a marriage, there is the Marriage Certificate, which most people keep or, if they lost it, a copy is easily obtainable from the State Office of Births, Deaths & Marriages. No such document usually exists in a de-facto relationship, unless one of the parties have registered the relationship, which, in practice, seems to happen fairly rarely.
Of course, if there is a child of the relationship, then the two year limit and the other qualifying factors do not apply, but if there is no child, and the relationship is of less than two years standing, the substantial contributions and/or serious injustice provisions have to be relied upon.
Once a de-facto relationship is proven, the law is the same
Once it is legally established that there was a de-facto relationship, the law applicable to financial settlements, including division of property, superannuation splits and spousal maintenance are the same as for a married couple. The law in relation to who will care for the children is the same for married couples and de-factos.
If a couple are found to not be in a de-facto relationship, there are other remedies for financial adjustment between them, but those rely upon the State Civil Courts and the use of resulting and/or constructive trusts – an expensive exercise with uncertain outcomes. However, those types of cases are becoming increasingly rare as the Family and Federal Circuit Courts seem to be trying very hard to bring de-facto couples under their wing by finding that there was a de-facto relationship and then applying the same law as with married couples.
The golden rule for de-facto relationships - record key dates and expenditure!
The golden rule for people in de-facto relationships is that they should carefully note (in a diary is sufficient), the date that the relationship commenced and the dates of any separations because of relationship problems (but not if one party is flying in or flying out of a remote job site or going to Antarctica for 12 months).
It is also a good idea to keep a careful record of expenditure, particularly where that may result in a capital gain, such as renovating or extending a dwelling and the cost of local and overseas holidays, the purchase of motor vehicles, putting monies into superannuation funds and the like.
As always, it is wise to get some legal advice before entering into a financial relationship with another person. As with married couples, Binding Agreements can be drawn up between de-facto couples to make provision for what will happen financially if the relationship breaks down.