How to Protect your Assets if you are in a Defacto Relationship
For many people the thought of protecting their assets is the last thing on their mind when entering into a defacto relationship. The thought that you may one day separate from your partner is often not even thought about. However, given current statistics (of over 50% of de facto relationships failing) it is important in this modern age to consider protecting your assets in the event of separation.
The usual way of protecting your assets is to enter into a Binding Financial Agreement. This agreement outlines what each person had at the time they started to live together and what each person will take with them if they separate. In some cases one of the parties may apply to the Court to have the Binding Financial Agreement set aside. However, if the Binding Financial Agreement is prepared properly, both parties have provided full financial disclosure to each other, and have each obtained independent legal advice, then the risk of the Agreement being set aside by the Court is minimised.
In the recent case of Chancellor and McCoy (2016), the parties to a defacto relationship had not entered into a Binding Financial Agreement and the person with the least assets applied to the Court for an adjustment of the other party’s property in her favour. The Court found that these parties who had been in a 28 year relationship could retain the property and superannuation that was in their respective names without alteration or adjustment. These parties had no children, had never owned joint property and had always kept their finances separate.
From this case we can assume that if a Binding Financial Agreement has not be entered into, it is likely that a court will consider the factors listed below when deciding whether or not to make any property adjustment in favour of the party in the relationship who has the fewer assets:-
- Whether the parties maintained joint bank accounts;
- Whether the parties kept their finances separate;
- Whether the parties purchased any joint assets;
- Whether any property in which the parties lived was paid for by the party who owned that property and whether the other party only paid rent or board and did not otherwise contribute to the property;
- Whether the parties discussed their financial affairs with one another;
- Whether the parties made any future financial plans together;
- Whenever the parties nominated each other as a potential beneficiary in a Will or superannuation fund.
It may also be important to protect yourself against your former partner asserting that he/she made ‘indirect’ financial contributions to your property during the relationship such as your partner in the relationship painting or maintaining the other’s home or assets and/or contributing to or making significant repairs and improvements to those assets.
Whenever you are thinking about entering into a relationship with your partner, it is always wise to seek expert legal advice from a Family Law Specialist who will provide you with as much information as possible in regards to protecting your assets in the event that you part ways.
At Selvaggio Lawyers our expert team of Family Law lawyers will be able to help you with any relationship matters you may have. Contact us to today on (02) 9899 9677 for a consultation today.Back