Sisters In Law: How are money and assets divided when a de facto couple splits?

She earns a six-figure salary and paid their whole house deposit. But in the break-up, how will their money be divided?

Welcome to Sisters In Law, news.com.au’s weekly column solving all of your legal problems. This week, lawyers and real-life sisters Alison and Jillian Barrett from Maurice Blackburn advise on what happens when a de facto couple split up.

Question:

I’ve been with my boyfriend for 10 years and we share a house, car, dog and savings account. We aren’t married but our relationship is de facto. I am very unhappy and want to leave him but I’m concerned about him taking my money. I work really hard and earn a decent six-figure salary.

Meanwhile, he changes jobs all the time, often working part-time for minimum wage. His inability to keep a decent job is one of the reasons I don’t want to be with him anymore. When we bought our place, I put down all of the deposit and I also bought our $3000 dog, plus my wages have built up the savings account.

I also have a good amount in my superannuation while his is languishing. If we separate will he be entitled to half of everything including the apartment, savings and my super? I can’t stand the thought of him getting so much when he’s so lazy! Is there anything I can do before we split up to stop this from happening? – Anon, WA

A woman wants to end her relationship, but splitting assets and money is a concern. Picture: iStock

Answer:

Under the Family Law Act, a partner in a de facto relationship is treated in an almost identical way to a married spouse. So, even though you weren’t married, you will be required to split your property.

The Family Court can make a property settlement as your de facto relationship was for more than two years.

In addition to the length of the relationship, the Family Court also considers other factors in determining whether a de facto relationship existed, such as:

1. whether you lived together and for how long

2. whether there was a sexual relationship

3. if you owned property together

4. how you organised your finances

5. how you acted about your relationship around other people, including in public.

You haven’t mentioned whether you have a “prenup” (a binding financial agreement) that was entered into before your relationship started.

The Family Court will look at a number of aspects of your relationship. Picture: iStock

Prenups are quite rare – and sometimes non-binding because they haven’t been drafted properly – so we’ll work on the basis you don’t have one.

Your main query appears to be whether there is anything you can do before separating to minimise what your boyfriend may be entitled to.

We would caution against trying to hide, sell or transfer any assets as the Court can still consider those assets when dividing the property.

However, here are some practical tips you should think about before separating:

1. open your own bank account

2. keep your personal information, including identification documents, in a safe place

3. change all of your login details, for example email addresses, bank accounts, Medicare, and social media

4. make copies of all relevant financial information outlining assets and debts (such as bank statements, income documents, credit card statements and superannuation details)

You may be relieved to know that property is not divided using a precise formula or a 50/50 split. All property is considered including cash, your house, savings account, cars, superannuation and any property owned before the relationship.

Financial and non-financial contributions to the relationship are considered. Picture: Getty Images

Both financial contributions (such as wages and investments) and non-financial contributions (such as homemaker tasks or physical work on renovations) are considered.

Future needs are also taken into account. These include factors such as the ability to earn an income, and providing for any children.

When dividing property, the Court will then:

1. consider whether it is just and equitable to make a property settlement order

2. identify and value all assets, liabilities and financial resources to work out the ‘property pool’

3. assess the contributions each of you made to the property (including physical labour from things like renovations)

4. consider things like you and your boyfriend’s age and health, whether you are each earning an income, have the potential to earn an income, any children, the length of your relationship, and if either of you are living with someone else (plus that person’s financial circumstances)

5. distribute the property between the parties based on the above.

If you are able to reach an agreement with your boyfriend on how your property should be divided, without having to make an application to the court, it will be a much cheaper and usually quicker process.

Try to reach an agreement without involving the court if possible to save time and money. Picture: iStock

If you can reach an agreement, then you should formalise that in the Family Court by applying for consent orders.

There are strict time limits to apply to the Family Court for a property settlement – you must make an application within two years of separation.

The Family Law Court has more information and many community legal centres will be able to provide free and confidential advice.

This legal information is general in nature and should not be regarded as specific legal advice or relied upon. Persons requiring particular legal advice should consult a solicitor.

If you have a legal question you would like Alison and Jillian to answer, please email [e-mail]

Get more from Alison and Jillian on their Facebook page