Can a De Facto Partner Claim Property After Separation?

What Is a De Facto Relationship?

The Family Law Act 1975 defines a de facto relationship as a relationship between two people who are not legally married to each other and not related by family, but who live together as a couple on a genuine domestic basis.

Whether a de facto relationship exists is a question of fact. The court looks at the overall nature of the relationship rather than relying on any single feature. Factors that may be considered include:

• Living arrangements: the extent to which the parties shared a residence or otherwise organised their lives together.
• Financial interdependence: joint bank accounts, shared expenses, joint ownership of assets, or one party financially supporting the other.
• Mutual commitment: evidence of a shared life and a longer-term commitment to each other.
• Public presentation: whether the relationship was held out to family, friends and the wider community as a couple.
• Care and support: the extent to which the parties cared for and supported one another, including in matters such as illness, children or day-to-day life.
• Sexual relationship: the existence of an intimate relationship may be relevant, although it is not essential.
• Children: whether the parties have a child together or share the care of children.

No single factor is determinative. Two relationships with very different features may both be characterised as de facto, while two superficially similar relationships may be treated differently depending on the broader context.

Does Living Together Full-Time Matter?

A common assumption is that a de facto relationship requires the parties to live together continuously and under one roof. The legislation and case law take a broader view.

The court assesses the relationship as a whole. A de facto relationship may exist even where the parties maintain separate residences, spend significant periods apart for work or family reasons, or move between homes. What matters is whether, looked at overall, the parties were living together as a couple on a genuine domestic basis.

Decisions such as Martens & Bocca illustrate that ongoing financial and emotional commitment, shared decision-making and mutual care can support a finding of a de facto relationship despite the parties not sharing a single household at all times.

When Can a De Facto Partner Make a Property Claim?

A court can deal with property settlement and spousal maintenance between de facto partners where at least one of the following applies:

• Duration: the relationship lasted for a total period of at least two years.
• A child of the relationship: the parties have a child together.
• Substantial contributions: one party made substantial financial, non-financial or homemaking contributions, and a failure to recognise those contributions would result in serious injustice.
• Registered relationship: the relationship was registered under State or Territory relationship legislation.

Strict time limits apply. As a general rule, an application for a de facto property settlement or spousal maintenance must be made within two years of the relationship ending. Applications outside that period are only permitted in limited circumstances and with the court's leave.

What Can Be Included in a Property Settlement?

A property settlement looks at the assets, liabilities and financial resources of both parties, regardless of whose name they are held in. Items commonly considered include:

• Real estate: the family home, investment properties, holiday homes and vacant land.
• Savings and cash: bank accounts, term deposits and cash holdings.
• Investments: shares, managed funds and other financial investments.
• Businesses: interests in companies, partnerships and sole-trader businesses.
• Trust interests: interests in family or discretionary trusts, depending on the circumstances and the level of control exercised.
• Superannuation: superannuation balances, which are treated as property and can be split between the parties in appropriate cases.
• Personal property: motor vehicles, household contents and other valuables.
• Debts and liabilities: mortgages, personal loans, credit card debt, tax liabilities and guarantees.

There is no automatic 50/50 division of property in a de facto settlement. The court considers contributions made by each party, their future needs and what is just and equitable in all of the circumstances. Two relationships with similar asset pools can produce very different outcomes.

How Can People Protect Their Assets?

For couples entering, already in, or leaving a de facto relationship, there are several practical steps that can help clarify expectations and protect individual positions.

• Binding Financial Agreements: a properly drafted Binding Financial Agreement, made before, during or after a relationship, can set out how property and financial resources will be dealt with if the relationship ends. Strict requirements apply, including independent legal advice for each party.
• Maintaining clear records: keeping accurate records of contributions to assets, the source of funds used to purchase property, and the management of joint and separate finances can be valuable evidence if a dispute later arises.
• Obtaining legal advice early: early advice helps each party understand what may form part of a property pool, how contributions are likely to be assessed, and what options exist for resolving matters by agreement.
• Estate planning considerations: Wills, superannuation death benefit nominations and related arrangements should be reviewed when entering or leaving a de facto relationship to ensure they continue to reflect a person's intentions.
• Documenting intentions: where one party is contributing significantly to an asset owned by the other, or where parties intend that certain property be treated separately, those intentions should be properly documented at the time.

Simply keeping assets in separate names, or avoiding joint accounts, will not on its own prevent a future property claim. A court can look behind legal ownership to consider the contributions and circumstances of both parties throughout the relationship.

Key Takeaways

De facto relationships can give rise to significant legal rights and obligations, including in relation to property settlement and spousal maintenance. Those rights exist regardless of whether the parties ever intended to marry.

Because each relationship is assessed on its own circumstances, outcomes are highly fact-dependent. Whether a de facto relationship exists, what falls within the property pool and how contributions and future needs are weighed all require careful analysis.

People entering, living in or leaving a de facto relationship should obtain legal advice tailored to their circumstances. Early advice provides clarity, supports informed decision-making and can help avoid disputes later on.

If you require advice regarding de facto relationships, property settlements, spousal maintenance or Binding Financial Agreements, contact Parke Lawyers for assistance.