De Facto Property Settlement Rights
Relationships break down. This is nothing new, and sorting out the property settlement can be one of the most difficult parts of legally ending your relationship. There are two main ways of achieving a property settlement, and your rights are the same whether you are married, or in a de facto relationship:
- Agreement – both of you can agree on how you want to go about dividing your property and other assets, and need not involve the courts at all. If you do agree, you can formalise your agreement through the family court.
- No agreement – you will need to apply through the family court for something known as a financial order.
What does de facto mean?
De facto means ‘in effect’ or ‘in practice’. Essentially, a de facto relationship is when two people are living together, but haven’t made their relationship official and are not legally married. Previous to 2009, unless you were married, you didn’t have much chance of an equitable solution through the courts once your relationship dissolved.
Laws to recognise those in de facto relationships
In 2008, the Australian Government introduced new legislation to make sure that de facto couples were entitled to the same benefits as married couples in the event of a relationship breakdown. The laws came into effect in March 2009, making all those with a geographical connection to states or territories other than South Australia subject to federal family law under the Family Law Act 1975. The new laws commenced in South Australia a little later, on July 1, 2010.
This means that eligible parties can apply to the family court or the federal circuit court for a financial order in the same way as married couples.
It’s important to note that you need to apply within two years of the relationship breaking down, otherwise the court needs to give permission for the application.
These laws are not retrospective – original state or territory laws still apply to those relationships that broke down before 2009/2010, but it is possible to choose to have the new laws apply as long as it is in writing and signed by both parties.
Eligibility
Section 4AA of the Family Law Act 1975 sets out exactly what a de facto relationship is under Australian law. The requirement is that you and your former partner are not legally married to each other, are not related, and are a couple living together on a ‘genuine domestic basis’.
The sex of the partners is not relevant. The courts hear applications from both traditional male-female partnerships as well as same-sex partnerships.
Also, you will still be deemed to be in a de facto relationship even if one of you is legally married to someone else, or is in another de facto relationship. You can even be in a legal de facto relationship if you are in an “open” relationship where each partner is free to sleep with others.
In deciding whether two people were in a de facto relationship for the purposes of a property settlement, the court will examine the length and nature of the relationship, if you were living together, if you owned property together, how you managed your finances, if you had children together, and if you acted like a couple in public.
Do I apply to the family court or federal circuit court?
You can apply to the family court or federal circuit court, but it is advisable to seek legal advice before choosing which court. Both courts fall under the family law courts umbrella and share jurisdiction in all family law issues. However, the federal circuit court hears less complex matters resulting in quicker decisions, whereas the family court generally hears complex matters.
What is the federal circuit court?
The federal circuit court is an independent federal court under the Australian Constitution. The court was established to provide a simple and accessible alternative to litigation in the Federal Court of Australia and the Family Court of Australia and to relieve the workload of those courts.
How will the court make a decision?
It will come down to your particular set of circumstances, but the judge is bound by the general principles of the Family Law Act 1975. These general principals are based on:
- Your assets versus debts, what you own and what you owe.
- The financial contributions by each party.
- The indirect financial contributions by each party, home-duties included.
- Your future requirements taking into account age, health, financial resources, etc.
It is worth noting that de facto couples can make binding financial agreements about the way they manage their assets together.
This can be done at any time in the relationship, even after separation.
In order for it to be binding, both parties must receive independent legal advice. Make sure you speak to a family lawyer – financial agreements need to comply with certain formalities.