It’s wonderful to find love again later in life and let’s face it, it’s not often in the flush of any new relationship that your thoughts turn to the legal or financial ramifications of romance – but with more older Australians starting over, it might be worth your while taking stock before you take the leap.
A lifetime of hard work, investments or even an inheritance can leave you with a large retirement nest egg, perhaps properties and other assets. It means ‘later in life love’ might be risking more than just your heart.
Laws surrounding relationships and de facto relationships have evolved as society’s definition of coupledom has changed, so there are many ways of defining a relationship these days.
What you think might be a casual courtship could in fact be seen as a formal relationship or even a de facto relationship in the eyes of the law, which can provide many legal protections just like a legal marriage.
Aside from a legal marriage or civil ceremony certificate, the Courts would also consider things like the length of the relationship, if you live together, if there is a sexual relationship or if there is a financial dependence or arrangements for financial support. The ownership of property or care of children can also determine the legal status of your relationship. How you hold yourself out to friends and family – and even your relationship status on Facebook – can also be relevant.
The Court could make orders in relation to your assets if:
The celebrities call it a “pre-nup” but in Australia it’s known as a Binding Financial Agreement (BFA) and it isn’t just for the rich and famous. A BFA is effectively an insurance policy against the risk that you might separate in the future, and it sets out how you want your assets to be divided in the event that you go your separate ways.
The main requirements for a BFA is that it is a written document, signed by all parties that are contemplating a marriage or a de facto relationship, which deals with property, financial resources and/or spousal maintenance in regard to that relationship.
Some of the other things a BFA might lay out are other financial responsibilities like adult child maintenance and also who keeps the pets if you were to break up.
You should always seek independent legal advice before signing a BFA (and in fact, it is a requirement that you do) to have the advantages and disadvantages explained to you.
We strongly suggest seeking legal advice before you marry or before your relationship is considered to be a de facto relationship, about what a separation may do to your financial situation.
Discuss what you and your partner want to occur with your assets in the event of separation. This isn’t easy – but it is easier than having the conversation for the first time at the end of your relationship!
Document the assets and superannuation that you come into any relationship with, along with documents about their value. For example a market appraisal of your property and balance of any loans owing.
Encourage your partner to be transparent with their assets and liabilities. The less surprises, the better.
And get some advice from an experienced family lawyer about ways to protect gifts, inheritances and other windfalls. There may be trust structures, different legal ownership options or loan agreements that may help with asset protection in the event of separation.
These kinds of discussions are not exactly romantic but can save so much heartache in the long run, and ensure your financial retirement remains secure.
All legal advice is general in nature. Please contact an expert Australian family lawyer for specific information regarding your individual case.
IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.
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