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Are we more than “just friends” in the eyes of the law? Understanding your entitlements or obligations when a de facto relationship ends

informal relationships can lead to legal troubles - it is important for de facto couples to understand their rights to a property settlement in the event the relationship breaks down

The concept of being “just friends” can put people in a false sense of security when it comes to what happens after a relationship breaks down. Married couples are not the only ones who are entitled to seek a property settlement in the event they separate, de facto couples are also able to make a claim. Simply taking the stance “we were just friends” may not hold up in court, explains Attwood Marshall Lawyers Family Law Senior Associate Hayley Condon.

Informal relationships can lead to legal troubles

The term “just friends” is being raised more and more often. It tends to arise when a relationship has broken down, a de facto property settlement claim has been made and one party to that relationship is defending the claim on the basis that “we were just friends, we weren’t in a relationship, and therefore you have no entitlement”.

Determining when a de facto relationship does exist is not as straightforward as it may seem. It comes down to the factual circumstances of each relationship. There are certain criteria that a court will look at when considering whether they believe a de facto relationship exists in order to determine if a party is eligible to make a claim for a property settlement.

That criteria includes:

  • the length of the relationship;
  • whether a sexual relationship existed;
  • the ownership of property and how it was used by the parties and acquired;
  • financial dependence or independence of the parties – if one party is supporting the other;
  • the care of children;
  • the mutual commitment to a shared life;
  • the public aspects of the relationship, were the parties presenting to the public and family members as a couple;
  • have the parties listed each other as next of kin on medical or government forms;
  • was one party sending the other party cards or mementos of an intimate nature.

One important point to raise is just because you have told Centrelink you are not in a de facto relationship doesn’t mean that is the case.

De facto relationships where two people live separately

People often assume if two people live together in a home, but maintain separate bedrooms, that because they have got that physical distance they are not in a de facto relationship. Just because you maintain separate bedrooms doesn’t mean you are not in a relationship.

To take that one step further, the same also applies for couples who maintain separate residences. Even if couples claim they only reside at each other’s residence on occasion, such as during the week or over weekends, it does not exclude them from being in a de facto relationship in the eyes of the law.

For the most part when people move in together and start sharing the burden of maintaining a household, this is generally when a de facto relationship will commence. However, every case is different. There can be reasons why people maintain separate residences but in all other aspects are operating as a committed couple.

Despite your living arrangements, the court is going to look at the extent to which two people have merged their lives together as a couple.

Property settlement claims and de facto relationships

Being in a de facto relationship with someone does not automatically entitle you to make a claim for a property settlement if that relationship breaks down.

In order to be eligible to make a claim for a property settlement, you need to have been in that committed relationship for at least two years. That doesn’t necessarily mean two consecutive years, it can be the total period of the relationship.

If the total period of your relationship is less than two years, there are still certain circumstances where you can make a claim. These include:

  • if your relationship is registered;
  • if you have a child together; or
  • if one party has made a significant contribution to the relationship, normally financial, and the other party would suffer financial hardship if the court didn’t make a property settlement order in their favour.

After separation, parties have a period of two years within which to make a property settlement claim otherwise they will be out of time.

For those who wish to make a claim after the time period has lapsed, there will be extra criteria and hurdles that will need to be jumped over in order to get the court’s leave.

It’s always best that after you go through a relationship separation, you speak to an experienced lawyer immediately so you can get the appropriate advice on whether you are entitled to a settlement, what the timeframe is for commencing proceedings, as well as what the range of your entitlement might be.

Other legal documents to turn your mind to after a separation

By obtaining legal advice as to your rights after separation, this also gives you the opportunity to review or change any legal documents you have in place that no longer truly reflect your wishes due to the change in your relationship status.

Documents you will need to consider include your Will, Enduring Powers of Attorney and the most forgotten document of all, life insurance policies nominated beneficiaries and superannuation fund nominated beneficiaries.

Legal consequences for infidelity

For those who are married and enter into a relationship on the side – there can be significant consequences as the second relationship is considered a de facto relationship. This could present whichever spouse is conducting this relationship with a big problem – a very sticky situation.

Case study: A married man was in a de facto relationship with another person while he was married. He ended the relationship with his de facto partner. The de facto partner made a claim for a property settlement. In this case, the claim would pull in the assets of the man, being the spouse having the affair. The married man’s wife then found out about the affair due to the litigation proceedings. As a result, the wife separated from her husband and bought her own property settlement claim upon separation.

The result – the man was faced with litigation for two partners seeking property settlements.

The takeaway: People should be careful of the relationships they conduct and the level of commitment that they want to show each other. The extent to which they involve each other in their finances and financial decisions can mean there may be legal merit for one partner to make a property settlement claim if that relationship goes pear-shaped.

Advice for “friends” taking their relationship to the next level

For people moving forward into a new relationship – the best advice would be don’t rush in to intermingling your financial affairs with each other.

In order to be eligible to make a property settlement claim, parties need to have been in a de facto relationship for two years. There is a bit of time there in terms of enjoying each other’s company to see in what direction things go.

You have options in terms of protecting yourself if you want to take the relationship that step further. Considering entering into a Binding Financial Agreement can be a great way to have an open and honest conversation with your partner and address any issues around how matters will be settled in the event the relationship comes to an end in the future.  People traditionally call them prenups. It is a document that you can enter into before commencing a de facto relationship, or during a de facto relationship. This can save a lot of heartache, stress and expense down the track, and also eliminate some of the fear of the unknown by discussing financial matters upfront.

Read more: Prenuptial Agreements, Relationship Agreements, Financial Agreements – what’s the different and do we need one?

How can Attwood Marshall Lawyers help?

Attwood Marshall Lawyers have a dedicated team who exclusively practice in family law. It is our intent to help families sort through the legal issues after separation so that all parties can move on with their lives. We understand that the stakes couldn’t be higher when it comes to family law matters.

Our expert team can provide you with the advice you need when moving forward in a relationship, ensuring you protect your assets.  Before taking your relationship to the next level, it’s important to understand when a property settlement claim can be made, how courts make orders and what steps you can take to try and guard against a claim in the future.

We are of the view that no two cases are the same, no matter how similar or familiar they may seem. We are dedicated to listening to your needs, assessing your personal situation, setting goals and formulating a strategy to best achieve those goals.

For advice you can depend on and to find out more about your rights after separation, please contact Family Law Department Manager, Donna Tolley on direct line 07 5506 8241, email dtolley@attwoodmarshall.com.au or call 1800 621 071.

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Hayley Condon

Hayley Condon

  • Senior Associate
  • Family Law
  • Direct line: (07) 5553 5805
  • Mobile: 0413 486 402