In a de facto relationship? Lawyer says sign a pre-nup to protect your assets

If you have been living in a domestic relationship for two years, you may legally be defined as in a de facto relationship. Source: Getty.

When you’re loved up and happy in a committed relationship, it can seem impossible to imagine that partnership ever breaking down, leading many people to make unwise choices when it comes to their wealth and assets.

While it’s common knowledge that married couples have an entitlement to the finances and belongings of their spouses, a top Brisbane lawyer has pointed out that many people are unaware that de facto couples – those who have been living together in a domestic relationship for two years – are also bound by the same laws.

With one in six Australians, according to the 2016 census, living in a de facto relationship, family law specialist Jennifer Hetherington said there is an urgent need for lawyers to do more to “rectify the public’s ignorance”.

“It’s increasingly vital we ensure they are made fully aware that our family law legislation applies to them, not just to married couples,” Hetherington said in a statement shared with Starts at 60.

Increasingly many couples are choosing to live together before tying the knot, or passing over marriage altogether, from young couples who think the practice is outdated to older couples who do not wish to remarry after the breakdown of their first marriage or loss of a spouse.

However, if that partnership ends, people may not be aware that the assets of both parties can actually be split in the same way they would for a married couple going through a divorce, with either person able to make claims on the other’s property, savings and even superannuation.

It is also important to note that a claim can still be made in relationships lasting less than two years if the couple make significant contributions to the assets of the relationship, the other person, or have a child together. De facto laws in Australia also apply to same sex couples and, depending on the length of the relationship, assets owned previously can also be dragged into it.

Hetherington said that people who find themselves living in this type of domestic situation should think about putting a pre-nuptial agreement in place to prevent any future issues arising, which is an agreement that protects each partner’s finances and assets in the event of a split.

“Increasingly the pre-nuptial agreement, officially known as a Binding Financial Agreement, should be a must-have for de factos,” she added. “One of the messages that needs to get out there in 2019 is that pre-nuptial agreements are not just for the celebrities.

“The point to remember is that pre-nups are absolutely legally enforceable. These agreements are not one-sided. They serve to protect the financial assets that each partner brings to the relationship. If a relationship later ends, the pre nup agreement offers a smooth and orderly division of the parties’ assets.”

Are you living in a de facto relationship? Would you consider entering into a pre-nuptial agreement to protect your assets?

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.

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