Understanding the details of the de facto separation property settlement process

Let us get straight into it … What is a de-facto relationship?

Under the Family Law Act, a person is in a de facto relationship with another person if:

• The persons are not legally married to each other,
• The persons are not related by family, and
• Having regard to all circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.

Other considerations made by the family court which make up a de-facto relationship include:

• The length of the relationship and whether it is sexual in nature,
• The level of financial interdependence if there are joint assets,
• The extent of mutual commitment to a shared life and,
• Reputation and public aspects of the relationship.

To register for a de facto relationship, couples need to apply for registration of their relationship, with at least one of the members within the relationship living in NSW. The relationship cannot be registered if either person is under 18, married, in another registered relationship or is related by family. Couples do not have to live together in order to register under a de facto relationship. Once everything has been approved, a certificate is then issued, similar to a marriage certificate.

It is important to understand the de facto separation process as well as the difference between a property settlement and a divorce. Speaking to a family lawyer in Sydney can be beneficial as they will provide you with the necessary advice and guidance making sure you are protected.

What happens to property when a de facto relationship breaks down?

De facto couples similar to married ones can obtain property settlements on the same fundamentals that apply to married couples who are in the process of separation. It is recommended for couples to first try and reach an agreement about their financial and property issues as this is a less complex process.

Fortunately, there are many Family Dispute Resolution (FDR) systems that can help partners reach an agreement without having to go to court. These methods should be considered before taking other legal steps. Speaking to a professional family lawyer for advice is recommended.

De facto couples have two years from the date of their relationship ending to make a property claim against their former partner. Usually, de facto couples need to have lived together for two or more years. However, sometimes if the couple has a child together, there may still be able to reach a property settlement with the Family Court.

If the separated de facto couple has decided not to reach a property settlement by the laws, they still have the option of reaching their own agreement.

Known as a binding financial agreement, couples will agree on property distribution and other assets. However, this can only be done after each individual has independently obtained legal advice. Speaking to a specialised family lawyer in Sydney is recommended.

A binding financial agreement can be established at any time of the relationship, even while couples are going through a separation. This agreement provides financial security for couples, ensuring they are fairly treated if anything was to go wrong.

Understanding de facto separation property settlement

It is key to comprehend that divorce and property settlement are two completely different legal processes. A divorce occurs between a married couple and is a termination of marriage, allowing them to remarry after it has been settled. Couples need to be separated for at least 12 months before applying for a divorce.

On the other hand, a property settlement is a division of property after a couple has decided to part ways. This is where the division of assets occurs. In a de facto separation property settlement, you can make an application under certain conditions. These include:

• The de-facto relationship must have lasted at least two years

• De facto partners must have a child together

• Both partners should be making contributions to property and finances

• The relationship must be registered

• Partners must have lived in NSW for at least one-third of their relationship or other states where the law applies

Separated de facto couples (including same-sex) can make an application for a property settlement under the Family Law Act. Couples usually proceed with this if they are unable to reach a decision about the division of assets.

The Family Court considers a range of aspects before deciding how the property should be divided. These include:

• Financial contributions each person has made into the relationship. Property owned by couples before the relationship and how relevant this is depending on the length of the relationship.

• The net value of current assets including; the value of property, houses, shares or superannuation 
• Contributions that each has made into the relationship 
• Other financial contributions including; wages and payments for property
• Non-financial contributions; renovations and contributions to family

After deliberating over the situation, the Family Court will come to an agreement regarding the proportion of assets that should be given to each couple. Additionally, they may order for the couple to separate their assets in a particular way.

These specific orders may include;

• Assets such as the family home should be sold and divided in a specific way

• The ownership of assets should be transferred into one person’s name

• Superannuation funds should be split

• Ongoing maintenance should be paid

Protecting yourself in a de facto relationship to avoid property settlements

If you are currently in a de facto relationship or are considering one, it is important to protect yourself in case the relationship breaks down.

• Research: ensure you are aware of the legal aspects of living together in a de facto relationship. Understanding the laws regarding property settlements and the division of assets is important
• Agreement: before moving in with a partner, it is recommended to consider reaching an agreement about the division of finances beforehand. This will safeguard you in the event of the breakdown of the relationship 
• Legal advice: legal advice is imperative! Speaking to a family lawyer in Sydney is important in gaining the required advice. These specialised family lawyers will guide you throughout the process and work out the steps you need to take to ensure your property and assets are protected. 

If you need more information about property settlements in de facto relationships or are looking for specialist advice from Family Lawyers in Sydney, Prominent Lawyers can help!

We understand the difficulties of a breakdown of a close, personal relationship and know how vital it is to obtain the proper advice and support.

Speak to one of our professionals today on 1800 77 66 46 or enquire here.