Things to think about when moving in

The law regarding de facto (including same sex) couples has been changing and it is likely that more claims will be made between partners.  There are all sorts of methods available, both simple and formal, to protect yourself if your relationship breaks down.

Practicalities when moving in

Keep in mind the practical effects of combining finances.  Whether it is as a secondary cardholder, a guarantor to a loan, or a co-tenant, at separation you may be left with your partner’s debts.  Most creditors do not worry whether one partner has not repaid a “fair share”.  They seek full repayment from wherever they can claim it.  For particularly large amounts it may be worth suing your former partner, but headaches may be prevented by keeping your finances separate and retaining proper records of your contributions during your relationship.

Family Law Act claims (maybe not straight away)

Whilst you may think you were in a de facto relationship, you may or may not be entitled to a Family Law Act claim if you separate.  You must either:

• Have been together for two years as de facto partners;
• Have a child together (including an artificially conceived child born to one of you whilst you are de facto partners);
• Have registered your relationship under the Victorian Relationships Act 2008 (which must be done by both of you by consent); or
• Have had one partner make such significant contributions to the relationship that it will be unjust for a Court Order not to be made regarding your finances.

If you meet any of these preconditions you can make a claim for a property settlement, or periodic or lump sum maintenance, from your former de facto.  The merits of your claim will depend on your contributions to your assets and your needs in future.

Other kinds of claims

Even if a claim under the Family Law Act cannot be made it may be possible to make a claim in a State Court involving issues such as allegations of undue influence and about the existence of trusts.  For example, if partners buy a house together with shared funds but register it in one name, the unregistered partner may be able to claim an interest in the house.  The application of the common law in these situations can be complex and expensive, but may be the only option.

Protection against claims

For peace of mind, a Financial Agreement can be made between you and your partner:

• Before you enter a de facto relationship;
• During your de facto relationship; or
• After you separate;

setting out how you will deal with a property settlement and maintenance (with some exceptions) if you separate (or because you have separated, as the case may be).  The Agreement must comply with Family Law Act requirements, including certification that both partners received separate solicitors’ advice being attached to the Agreement.  As long as it meets these requirements, it is up to you and your partner to decide how you would distribute your property in the event that you separate.

Aitken Partners can help you work out where you stand when you are entering, in or leaving a de facto relationship.