In Australia, de facto partners often have the same rights and obligations as married couples, especially when it comes to property, superannuation and financial matters. That means if your relationship ends, your assets could be divided by the Family Court in a similar way to a divorce.
Understanding how to protect your assets can save you stress, cost and heartache later on.
Consider a valid Financial Agreement
One of the most effective tools for asset protection is a Binding Financial Agreement (BFA). This legally binding document sets out how you and your partner will deal with assets, liabilities and spousal maintenance if the relationship ends.
A BFA provides clarity and certainty, and can reduce the risk of costly disputes later on. It’s important to have it properly drafted and signed with independent legal advice to ensure it’s enforceable under the Family Law Act 1975 (Cth).
Maintain separate finances where possible
Keeping individual bank accounts, investments and other financial assets separate can help establish a clearer distinction between what is yours and what is joint. This includes paying bills or mortgage contributions from your own income rather than pooling everything together.
The clearer the separation of finances, the more straightforward things may be in the event of a breakdown.
Keep records of your contributions
Both partners typically contribute to the relationship in various ways, financially and non-financially. Including: paying bills, maintaining the house, or caring for children.
Make sure you document the contributions:
• Keep bank statements, invoices, and receipts for financial transactions.
• Record large transfers, property-related payments, and investments.
• Retain written correspondence or notes about household responsibilities, improvements, or care arrangements.
Comprehensive documentation might be required to demonstrate your financial and practical contributions during a de facto relationship property settlement or if a dispute arises.
Update your Will and Estate Planning documents
If you are in a de facto relationship, ensure your Will and estate-planning documents reflect your wishes. This is especially important if you want to:
- Protect assets for children from a prior relationship
- Provide for your partner
- Prevent disputes between family members after death
Ignoring this step can lead to unintended outcomes. Under NSW law, a de facto partner may be entitled to inherit even if you aren’t legally married, so clear and updated estate documents are essential to ensure your assets are protected.
Regularly review and update documents
Your financial position, your relationship and your goals will evolve over time and your financial agreement, Will and estate plan should evolve too.
Review them regularly, particularly after major life events such as:
- Buying or selling property
- Having children
- Receiving an inheritance
- Starting or selling a business
Talk openly with your partner
Early, honest conversations about money, expectations and asset protection can prevent misunderstanding and resentment later on. It’s sensible to have open communication about:
- How you’ll handle joint expenses
- Ownership of major assets
- Future financial goals
Seek tailored legal advice
It’s important to remember that while these steps can help protect your assets, the legal framework around de facto relationships in Australia can be complex, and laws may change. Consulting with a qualified family lawyer is recommended to ensure that your assets are protected based on your specific situation.
At Orman Solicitors, we’re committed to delivering the highest quality legal services. We pride ourselves on providing reliable, trustworthy services, pragmatic legal advice and compassion and empathy in everything we do. No matter what your circumstances, our team always has the best interests of our clients in mind, and we’ll strive to be an advocate for you and your rights. If you’re looking for a trusted family lawyer in Sydney or Wagga Wagga, book a free chat with our team.
Case Study: when assets weren’t protected
When Emma met Tom, she owned a small unit that she had worked hard to buy after moving out of home. Tom moved in not long after they started dating. They kept things informal, Emma continued paying the mortgage, and Tom helped with everyday expenses.
They never signed a financial agreement, and Emma didn’t update her Will or keep detailed records of each person’s contributions.
After seven years together, the relationship ended. Tom claimed a share of Emma’s property, arguing his contributions entitled him to an interest. Because Emma hadn’t documented any agreement or sought legal advice early, she found herself in a costly, stressful property dispute.
What she thought was “clearly hers” became part of a complex settlement. Most of that pain could have been avoided with proper documentation and early advice.
Frequently Asked Questions about De Facto Relationships
What counts as a de facto relationship in Australia?
A de facto relationship exists when two people (of any gender) live together on a genuine domestic basis but are not legally married. The Court considers factors like shared finances, living arrangements and how long you’ve lived together. Generally, two years of cohabitation or having a child together is recognised as a de facto relationship.
Do de facto couples have the same rights as married couples?
Yes. Under the Family Law Act 1975, de facto partners have similar rights to married couples regarding property division, spousal maintenance and superannuation splitting.
How can I protect my assets before moving in together?
You can protect your assets by creating a Binding Financial Agreement, keeping clear records of contributions, maintaining separate accounts, and updating your Will and estate plan.
What happens to property if a de facto relationship ends?
Either partner can apply to the Family Court for a property settlement. The Court looks at both financial and non-financial contributions, as well as future needs, to decide on a fair division.
Can I protect my assets after moving in with my partner?
Yes, it’s never too late. You can formalise your financial arrangements at any stage of the relationship with a Binding Financial Agreement.
How long do I have to make a claim after separation?
In a de facto relationship you generally have two years from the date of separation to make a property or maintenance claim.
Can a de facto partner inherit automatically if I die without a Will?
Yes. In NSW, a de facto partner can inherit the same as a spouse under intestacy laws. That’s why updating your Will and estate plan is crucial.
Maggie Orman
Director
Maggie is the founder and director of Orman Solicitors. With over 25 years of experience, Maggie specialises in Family Law, Litigation, Estate Planning and Farm Succession Planning.
Maggie is committed to delivering pragmatic solutions that not only resolve immediate challenges but also safeguard families and future generations.
Disclaimer: The content presented in this article is offered for informational purposes and should not be construed as legal advice or a substitute for professional guidance. If you have questions or require legal assistance, we strongly recommend consulting with a Solicitor to address your individual circumstances.