Living together does not automatically mean you are in a de facto relationship.
Under the Family Law Act 1975, a de facto relationship generally exists where two people have a relationship as a couple living together on a genuine domestic basis. The couple may be of the same or opposite sex.
Several factors can help determine whether two people are in a de facto relationship. These include how long they have been together, how they manage their finances, whether they own property together, whether they have children and whether family and friends recognise them as a couple.
If you are moving in with your partner, it is important to understand your rights and responsibilities under Australian family law.
What is a de facto relationship?
Section 4AA of the Family Law Act 1975 sets out when a de facto relationship exists. A person is generally in a de facto relationship when they are not legally married to their partner, are not related by family and live together as a couple on a genuine domestic basis.
There is no fixed period that automatically makes a couple de facto. The Court considers the circumstances of the relationship as a whole.
The Family Law Act identifies several factors that may be relevant, including:
- How long the relationship has existed.
- The nature and extent of the couple’s shared home.
- Whether the couple has a sexual relationship.
- Whether the parties are financially dependent on each other or share financial responsibilities.
- Whether they own, use or acquire property together.
- The degree of mutual commitment to a shared life.
- Whether the relationship has been formally registered.
- Whether the couple has children and how they care for them.
- Whether family and friends recognise the parties as a couple.
No single factor determines whether a relationship is de facto. The Court considers all relevant circumstances.
Does living together for two years make you de facto?
Not necessarily.
The two-year period is important because it is one of the gateway requirements for certain financial orders after an eligible de facto relationship ends. It does not mean that a relationship automatically becomes de facto after two years.
Under section 90SB of the Family Law Act, the Court may make certain financial orders where a de facto relationship lasted for at least two years. Exceptions can also apply.
For example, an exception may apply where:
- the couple has a child;
- the relationship is or was registered under a prescribed law; or
- one party made substantial contributions and refusing an order would result in serious injustice.
How do I protect my assets if I’m in a de facto relationship?
One way to create greater certainty about your financial affairs is to enter into a Binding Financial Agreement.
A Financial Agreement can be made before or during a de facto relationship. It can set out how certain financial matters will be dealt with if the relationship ends.
A Financial Agreement can be particularly important where one party has significantly greater assets or financial resources than the other.
Financial Agreements have strict legal requirements. Each party must obtain independent legal advice before entering into a binding agreement.
If a de facto couple does not enter into a Financial Agreement, they may choose to keep their finances and property arrangements separate. However, keeping finances separate does not automatically prevent a relationship from being recognised as de facto.
Practical matters couples may consider include:
- Keeping finances and bank accounts separate, where appropriate.
- Clearly recording ownership of property acquired during the relationship.
- Deciding who is responsible for particular debts and financial commitments.
- Agreeing how household expenses and other living costs will be shared.
- Reviewing Wills, superannuation beneficiary nominations and life insurance arrangements.
- Obtaining legal advice about whether a Binding Financial Agreement is appropriate.
These arrangements may help clarify each person’s intentions. However, they do not determine whether a de facto relationship exists under the Family Law Act.
If you want to protect your assets if your de facto relationship breaks down, we recommend seeking legal advice from an experienced family lawyer.
What happens if we break up?
If an eligible de facto relationship ends, either party may have the right to seek financial orders under the Family Law Act.
These orders can deal with matters such as:
- property;
- financial resources;
- superannuation; and
- maintenance.
The Court does not automatically divide a de facto couple’s assets equally. If the parties cannot reach an agreement, the Court considers the relevant circumstances when deciding what orders should be made.
The usual two-year requirement for certain financial orders does not apply in every case. Exceptions can apply where:
- the de facto couple has a child;
- the relationship is or was registered under a prescribed law; or
- one party made substantial contributions and refusing an order would result in serious injustice.
In these circumstances, a party may be able to apply for financial orders even if the relationship lasted for less than two years.
There are also ways for de facto partners to resolve family law disputes without going to court. These may include negotiation, mediation and Collaborative Family Law.
What are my rights if my de facto relationship ends?
The Family Law Act allows eligible de facto partners to seek financial and other orders after separation.
The Federal Circuit and Family Court of Australia recognises that eligible de facto partners can seek financial orders through the family law system.
Financial matters can include:
- property settlements;
- de facto partner maintenance; and
- superannuation splits.
There is generally a two-year time limit from the date the de facto relationship breaks down to apply for financial orders.
If more than two years have passed, you will generally need the Court’s permission to apply out of time. Permission is not automatic.
If you are approaching the two-year deadline, or the deadline has already passed, it is important to obtain legal advice as soon as possible.
Separating parties may also be able to reach an agreement about their financial matters without going to court. Depending on the circumstances, the agreement can be formalised through a Financial Agreement or other appropriate legal documentation.
What happens to children after a de facto relationship ends?
The fact that parents were not married does not prevent the Family Law Act from applying to parenting matters.
Where parents cannot agree about parenting arrangements, the Court applies the relevant family law principles. The best interests of the child are the paramount consideration.
Children’s matters are therefore not determined simply by whether their parents were married or in a de facto relationship.
Key takeaway: moving in together does not automatically make you de facto
Living together is an important factor, but it is only one part of the assessment.
The Court may consider the nature of the relationship, financial arrangements, property ownership, mutual commitment, children and how the relationship is viewed by family and friends.
It is also important to distinguish between being in a de facto relationship and meeting the requirements for financial orders under the Family Law Act.
The two-year period is particularly relevant to the latter. It does not mean that every couple who lives together for two years automatically becomes de facto.
De facto relationship checklist
If you are unsure whether your relationship may be considered de facto, consider these questions:
- Do you live together as a couple?
- How long have you lived together?
- Do you share household expenses?
- Do you have joint bank accounts or financial commitments?
- Do you own or acquire property together?
- Do you have a sexual or intimate relationship?
- Do you make financial or personal decisions together?
- Do you have children together or share responsibility for children?
- Do your family and friends regard you as a couple?
- Have you made plans for a shared future?
No single answer determines whether a relationship is de facto. The circumstances must be considered as a whole.
Frequently asked questions about de facto relationships
How long do you have to live together to be de facto?
There is no fixed period of cohabitation that automatically creates a de facto relationship.
The Court considers the circumstances of the relationship to determine whether two people are living together as a couple on a genuine domestic basis.
However, a relationship lasting at least two years is one of the gateway requirements that may allow an eligible de facto partner to seek certain financial orders after separation.
Can a de facto partner claim my assets?
An eligible de facto partner may have the right to seek financial orders after separation.
Having separate bank accounts or owning assets in one person’s name does not necessarily prevent a financial claim. The Court may consider the parties’ contributions, financial circumstances and other relevant factors.
Can I protect my assets before moving in with my partner?
Couples considering living together may wish to obtain legal advice about a Binding Financial Agreement.
A properly prepared and binding Financial Agreement can provide greater certainty about how certain financial matters will be dealt with if the relationship ends.
Strict legal requirements apply, including requirements for independent legal advice.
What happens to property when a de facto relationship ends?
Eligible de facto partners may be able to seek property and financial orders under the Family Law Act.
The outcome depends on the circumstances of the case. There is no automatic rule that assets will be divided equally.
Couples may also resolve their financial matters by agreement without going to court.
Conclusion
De facto couples can have important rights and obligations under Australian family law. Living together for a particular period does not automatically determine whether a couple is in a de facto relationship. Instead, the Family Law Act requires the circumstances of the relationship to be considered when determining whether two people are living together as a couple on a genuine domestic basis.
If an eligible de facto relationship ends, either party may have rights relating to property, financial resources, superannuation and maintenance. Understanding your rights after de facto separation can help you understand your options and the steps available to resolve financial matters.
f you would like to protect your assets if your relationship breaks down, you may also wish to consider entering into a Binding Financial Agreement. This may be particularly relevant where one party has significantly greater assets or financial resources than their partner
There are strict legal requirements for making a binding Financial Agreement. Obtaining independent legal advice is therefore important before entering into one.
This is general information only and we recommend seeking professional advice relevant to your circumstances.
If you or someone you know wants more information or needs help or advice, please contact LEDA Lawyers or email [email protected].