Defacto Relationship
I have been living with my partner for 13 years, if we were to split and part ways. What would it cost me roughly?
No kids, no joint bank accounts, no joint assets. My partner lives in my house that is paid off, and in my name. I have various other investment properties, significant share portfolio within a family trust/business and likewise superannuation fund. Your advice is greatly appreciated.
Hi there. It sounds like you and your partner are living in a de facto relationship. This is a type of relationship that exists between two people who are not married but live together as a couple on a genuine domestic basis. The law recognises that de facto relationships can exist between two people of the same or opposite sex.
Separating from your de facto partner would mean that the property and assets you and your partner own would need to be divided up – this is known as a “property settlement”. If you have pre-existing financial agreement prepared by a lawyer, you can divide up the property according to the agreement.
If such an agreement does not exist, you can try to reach an agreement yourselves. Any agreement reached can be made binding by speaking to a lawyer who will help you both enter into a binding financial agreement or file consent orders with the Family Court or Federal Circuit Court. If you are having difficulties reaching an agreement with your de facto partner, you may want to consider accessing a family dispute resolution service (seewww.fdrr.ag.gov.aufor more information).
If you cannot reach an agreement with your de facto partner, you can apply to the Family Court or Federal Circuit Court for a property settlement. You would be eligible to make an applicable because your de facto relationship has lasted for more than two years. When deciding how the property will be divided, the Court will consider a number of factors, such as:
- what each of you owned before the relationship;
- the net value of your current assets (including superannuation);
- financial and non-financial contributions made by each person over the course of the relationship; and
- each person’s earning capacity and future needs.
The Court will consider these factors to determine what
proportion of the assets should be given to each person. You said that you do
not co-own any property with your de facto. While this suggests you would
retain ownership to that property, your partner may have some rights to a
portion of that property depending on whether he or she has made indirect
financial contributions (e.g. payment of household expenses) or non-financial
contributions (e.g. domestic tasks, renovations) and what his or her relative earning
capacity is in relation to your income.
Suggested way forward
You should try to reach an agreement with your partner about how to divide up the property. A family lawyer will be able to help you understand your rights and prepare a written settlement agreement, if appropriate. Alternatively, a lawyer can help you apply to the Family Court or Federal Circuit Court for a property settlement order. By pressing the “Take Action” button, LawAdvisor can help you search for experienced lawyers and obtain fee proposals for their services. Costs for legal advice and representation will vary between providers based on experience and the scope of services.
Dear member,
The single biggest factor that will impact costs is whether or not you already have an agreement with your partner about the terms of any settlement. If not, and there is a dispute, the particular process you use to help reach a settlement will also be very important.
For example, at one end of the scale you could use a mediation service with minimal input from lawyers except to draft any settlement documents. The total cost might be something like $5,000 - $10,000. At the other extreme is a fully litigated court case where a Judge eventually makes a decision about how the assets should be divided. That would cost at least $50,000.
In-between is a process called collaborative law which involves both parties and their lawyer signing a contract in which they agree not to go to Court. Collaboration is about finding solutions, not finding more things to fight about. Compared to traditional litigation methods, it’s dignified, discrete and allows you to stay in control.
I'd be happy to discuss your situation in more detail if you would like to make an appointment in my office at a convenient time.
Regards.
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Other Questions
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Good afternoon,
In order to do a property settlement you need to obtain a Court Order. The easiest way to do so is to seek Orders by consent. Both parties negotiate the property distribution and reach an agreement in relation to the terms of the split.
After that the parties can file an Application for Consent Orders together with the Minute of Consent Orders Sought with the Family Court/Federal Circuit Court of Australia.
PROPERTY POOL
Firstly, you need to identify the property pool. Generally speaking the property pool is value of all your and you partner’s assets less value of all liabilities. It does not matter who is a legal owner of a particular asset.
PROPERTY DISTRIBUTION
It is very important to understand that even the parties have reached and agreement the Court needs to be satisfied that the proposed property distribution (split) is just and equitable i.e. fair from legal prospectives. The Court is not bound by the parties’ proposal.
Generally speaking, to determine whether the proposed split is just and equitable the Court would consider the following factors:
1. Parties financial contributions towards the relationships;
2. Parties non-financial contributions towards the relationships;
3. Other factors such as future needs, earning capacity, care for a child etc.
I would recommend you to seek legal advice whether the proposed property distribution could be considered as just and equitable.
In relation to legal costs it depends on how complex the matter is. Usually, it takes about 8-12 hours of legal work and includes:
• Advice;
• Review the disclosure materials in relation to the property pool and the parties’ financial circumstances.
• Correspondence with your partner;
• Drafting Minute of Consent Orders;
• Drafting Application for the Court;
• Drafting a Jurisdictional Affidavit (if required, for de facto partners only);
• Filing documents with the Court;
• Correspondence with the Court;
Therefore, you can expect $2640.00 - $3,600.00 incl GST in legal fees ($330 incl GST per hour).