How to Protect Your Assets in a De Facto Relationship?
In protecting assets de facto relationship, consider entering into a Binding Financial Agreement (BFA) with your partner.
These legal documents outline how assets will be divided in the event of a separation.
Additionally, keeping detailed records of your assets and financial transactions can provide a clear picture of what you brought into the relationship, which can be invaluable during legal proceedings.
It’s also wise to consult a legal expert to tailor these tools to your needs.
Why Protect Your Assets?
According to the Family Law Act 1975, a de facto relationship exists when two people are not legally married or related by family but live together on a “genuine domestic basis.”
Factors like the duration of the relationship, financial dependence, and public perception are considered in determining the status of a de facto relationship.
Being in a de facto relationship has implications for your assets and property. Courts have the authority to divide assets, including property, cars, boats, and superannuation, between separated parties.
Therefore, taking steps and protecting your assets is prudent, even if separation seems unlikely.
Legal Tools for Asset Protection
Binding Financial Agreements (BFAs)
The most effective way to protect your assets is through a Binding Financial Agreement (BFA).
Like a prenuptial agreement, a BFA outlines how assets will be divided upon separation. It can also specify terms for spousal maintenance and child support.
Time Limits and Legal Procedures: Protecting Assets De Facto Relationships
Two-Year Window for Claims
If you’ve separated from your de facto partner and are contemplating claiming property or assets in Australia, you’re racing against the clock.
You have a two-year time limit from the date of separation to initiate legal proceedings.
Missing this deadline could mean forfeiting your right to make a claim, so it’s crucial to act promptly.
Asset Pool Assessment
The first step in the legal process involves determining the “asset pool,” which includes all assets jointly or individually owned by both parties.
This encompasses real estate, vehicles, investments, and even superannuation.
The court will evaluate the current market value of these assets, minus any liabilities like loans or debts, to arrive at a net worth.
Contributions from Both Parties
The court will then assess the contributions made by each party from the start of the relationship until the date of separation. Contributions can be:
- Financial Contributions: Such as income, property, or assets brought into the relationship.
- Non-Financial Contributions: Like home improvements or contributions to the other partner’s career.
- Homemaker Contributions: Such as childcare, household chores, and general maintenance of the home.
The court also considers the future needs of both parties. This involves looking at factors like age, health, financial resources, and the responsibility of caring for children.
For example, if one party has a significantly lower earning capacity or health issues, the court may allocate them a larger share of assets.
Justice and Equity
Finally, the court aims to ensure that the division of assets is just and equitable.
This doesn’t necessarily mean a 50/50 split but rather a fair distribution based on the unique circumstances of the relationship.
The court will weigh all the factors mentioned above to arrive at a decision that is considered fair to both parties.
Seek Legal Counsel
Protecting your assets in a de facto relationship is a financial decision and a crucial part of relationship planning.
Legal tools like BFAs and financial agreements offer robust ways to safeguard your assets.
However, seeking legal counsel to tailor these tools to your specific needs is always advisable.
Director of Melbourne Family Lawyers, Hayder manages the practice and oversees the running of all of the files in the practice. Hayder has an astute eye for case strategy and running particularly complex matters in the family law system.