The things you need to know if you change your relationship status

New relationships
When it comes to new relationships there's a lot to talk about.


It’s a fact that later in life your relationship status may change.

After divorce, or the loss of a husband or wife, getting married again might be the last thing on your mind. That doesn’t mean you want to be alone.

Rachael Scharrer, founder of online resource DivorceAnswered, says many Baby Boombers find love again, or find companionship, but don’t always know what that means when it comes to the finer details.

We all know the term de facto, but what does it mean? “With so many variables surrounding relationship definitions, here are a few truths about de facto relationships,” Rachael Scharrer says. Here she shares the facts you need to know.

Ad. Article continues below.


Section 4AA of the Family Law Act 1975 defines a de facto relationship as when you and your partner (of opposite or the same sex) are engaged in a relationship as a couple living together on a mutual, genuine and domestic basis. The exception to this definition is if you are legally married or if you are related to your partner.

 Verbal agreements don’t hold up

Regardless of what was agreed or discussed during the de facto relationship, unless a legally binding document is upheld at the end of the relationship, all assets, liabilities and contributions are taken into consideration for financial splits.

If it isn’t in the will then it isn’t their will 

Ad. Article continues below.

Some couples set up agreements in their Last Will to ensure that their partner is cared for the rest of their lives after one half has died. There are clauses like exclusive use of an individual’s property by the surviving partner. Then, once the surviving partner passes away, the family can use, sell or manage the asset as they see fit.

There may be hidden funds

Baby Boomers have worked hard for their financial standing and it is well understood that many have secret bank accounts, shares or investments that their de facto spouse is not aware of. Sometimes mail is redirected to another address or structured so that a family member is managing special assets.

 Inheritance proofing and protection

With an ageing population, many of the children of Baby Boomers are establishing discretionary trusts so that Baby Boom de facto spouses are not able to access their inheritance and the Baby Boomer effectively becomes the ‘beneficiary’ to their asset rather than the legal owner of the asset. Discretionary trusts are more difficult (or not at all possible) to include as an asset in a financial settlement.

Ad. Article continues below.

 De Facto by Distance

Some Baby Boomers like their routine, space and, for some, they don’t like to share a bedroom because of different sleeping behaviours. These couples often run two homes, be it in the same city or different cities. ‘De Facto By Distance’ means that even though you aren’t living together, you exclusively stay at each other’s place when you are together and qualify for other elements of the de facto relationship (in social, commitment and sexual natures).

 Decision delegation

Most importantly, if you have a desire or outcome that you wish to be in control of make sure you have it legally documented. For instance, if you have a health concern, who will you appoint as your Power of Attorney and who will you give your Enduring Power of Attorney to? Yes, there is a difference!

 Making a claim

Ad. Article continues below.

You have to apply for de facto financial orders within two years of the breakdown or end of the relationship. One way to protect yourself against any financial claim or ‘messy aftermath’ is to create a Binding Financial Agreement. This can be written up either before the commencement of the relationship or during the relationship. This agreement will outline the distribution of assets and liabilities and how and whether any maintenance is required. The agreement will need to be lodged at the Family Court and must be done with the advice of independent lawyers.

Am I a de facto?

Not everyone knows if they are in a de facto relationship. Below is a list of items that are considered in determining if you are part of a de facto relationship:

  1. Combined finances, an element of financial dependence or interdependence, or a financial agreement or arrangement
  2. Commitment to each other in a relationship and the roles each person takes within the relationship
  3. Registration of a de facto relationship in a state or territory that requires relationships to be registered
  4. You consider yourself in a de facto relationship
  5. Your family and friends consider you in a de facto relationship
  6. You are engaging in a sexual relationship
  7. You are living together
  8. You have children or support children/family together
  9. The ownership, use and acquisition of their property
  10. The reputation and public aspects of the relationship

Scharrer suggests getting legal advice if you fit the bill in any of these cases.

Have you sought advice on your relationship matters?

Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.