Australia's Family Law recognizes that couples who live together in a close relationship for two years, or for a shorter period if they have a child together, can be regarded as being in a de facto relationship. The law regarding property settlement for de factos is the same as for married couples and, like property settlements for married couples, several factors are taken into consideration when determining a settlement. The law also applies to same-sex couples.
It's an important issue to consider when more than one-fifth of Australians aged in their 20s live with de facto partners and ten per cent of middle aged folk are now in de facto relationships. Nobody likes talking division of the spoils while they are still together, but it can save a lot of heartache and expense if they break up.
It would help to get legal advice early as various circumstances can develop.
What if a couple shack up together with no initial thought of making it a lasting relationship? What if one person moves into the home of another but makes no financial contribution, or a far smaller contribution, to the combined living expenses? What if there is a physical relationship but one of the partners only sees it is a casual dalliance? What if one of the partners is married?
If there is a dispute about whether two people were in a de facto relationship the law considers matters such as the length of time they've been together (usually a minimum of two years is required but there are exceptions), whether a sexual relationship exists, the degree of financial interdependence, whether property was jointly acquired, used and owned, whether the couple had or cared for children together, how the relationship was presented in public and the degree of mutual commitment to a shared life.
It's important to remember that if a couple take out joint loans and one runs into financial trouble, the other partner can be left responsible for the entire debt. If a couple buy a home and the parents of one gift a large amount it could end up being split between the partners. It would be best to make such a gift a formal loan agreement so that it doesn't become part of the property settlement.
The law takes quite a few things into consideration if one of the de facto partners seeks a property settlement when they split, particularly if the couple have a child together. It can be just as complicated as a property settlement for married couples, so it's wise to get good legal advice.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.