Implications of a De Facto Relationship?
Many people are not aware that, when they commence living with another person, they are placing themselves at risk of having a portion of their assets awarded to the other person if the relationship breaks down. If it is determined that the parties were living in a de facto relationship, and they had not entered into a Binding Financial Agreement either before entering into the relationship or during the relationship, the division of the property of the parties would be determined according to the Family Law Act.
The Family Law Act contains several provisions which, in effect, provide those people in de facto relationships with the same rights as married couples with respect to the division of property following the breakdown of the relationship. These provisions aim to safeguard those couples who cohabitate but do not enter into a relationship. A property settlement between parties to a de facto relationship would take into account all of the property held by the parties jointly and held by each of the parties individually. The property that would be considered includes all assets which are owned, whether wholly or in part, all debts which are owed and all financial resources which are held, such as superannuation accounts, trust funds, and, in some circumstances, future inheritances.