Defacto Relationship Property Matters

Introduction

Up until 1st March 2009 property disputes between former defacto partners (whether of the same or opposite sex) where:

  1. Governed by separate laws in each state or territory;
  2. Dealt with in state courts

Separation Before 1st March 2009

What if we separated before 1st March 2009?

In Queensland, if a defacto couple separate before 1st March 2009, any property issues are dealt with under the Queensland Property Law Act. Any dispute is, unless the former defacto partners agree otherwise (see below), still dealt with in Queensland State Courts. If a defacto couple separated before 1st March 2009 they may choose whether their matter dealt with in the Queensland State Courts or the Commonwealth Family Court or Federal Magistrates Court.

What if we separated after 1st March 2009?

If a defacto couple separate after 1st March 2009 any property dispute must be:

  1. Decided under the Family Law Act; and
  2. Dealt with in the Family Court or the Federal Magistrates Court.

What are the state laws that apply if we separated before 1st March 2009?

Under the state laws, in deciding a property dispute, the state courts take account of variety of matters including:

  • The assets and liabilities each of you had at the start of your relationship;
  • What you each contributed during your relationship (this includes direct and indirect financial and non-financial contributions);
  • Whether either of you has the care of a child, including a child of your relationship;
  • Whether circumstances during your relationship have affected the earning capacity of either of you.
  • What financial resources you each have (in particular this includes your superannuation entitlements).
  • How you have conducted the financial aspects of your relationship (for example whether you had joint bank accounts, how you met the payment of bills and household expenses)
  • Your respective financial circumstances after separation.

The above is a summary and is not an exhaustive list.

The state courts then look at the pool of assets and liabilities of both of you at separation and decide how that pool should be divided between you. All assets and liabilities are usually taken into account, regardless of whether they are in both names or in the name of one person only. In the state courts, superannuation is not included in the pool of assets and liabilities to be divided up. The state courts also do not have power to order one person pay maintenance (called spousal maintenance) to the other person. If you and you former partner reach agreement about the division of property after you separate, that agreement could be recorded in a Separation Agreement. Prior to 1st March 2009 a defacto couple could enter into a on-line form Cohabitation Agreement to record how their property was to be divided if they separated.


Separation After 1st March 2009

What if we separated after 1st March 2009?

If a defacto couple separated after 1st March 2009 any property issues are governed by the Commonwealth Family Law Act and any dispute is dealt with by the Family Court of Australia or the Federal Magistrates Court.

What are the Commonwealth laws that apply if we separated after 1st March 2009?

Under the Family Law Act, in deciding a property dispute, the Family Court or Federal Magistrates Court take account of variety of matters including:

  • The assets and liabilities each of you had at the start of your relationship;
  • What you each contributed during your relationship (this includes direct and indirect financial and non-financial contributions);
  • Whether either of you has the care of a child, including a child of your relationship;
  • Whether circumstances during your relationship have affected the earning capacity of either of you.
  • What financial resources you each have.
  • How you have conducted the financial aspects of your relationship (for example whether you had joint bank accounts, how you met the payment of bills and household expenses)
  • Whether either of you have the care of children
  • Your respective financial circumstances after separation.

The above is a summary and is not an exhaustive list.

The court then looks at the pool of assets and liabilities of both of you at separation and decides how that pool should be divided between you. All assets and liabilities are usually taken into account, regardless of whether they are in both names or in the name of one person only.

What about our superannuation?

Superannuation of each person is included in the pool of assets divided by the court.

The court has power to make a superannuation splitting order as part of the division of the pool of assets and liabilities. A superannuation splitting order is an order transferring all or part of the superannuation entitlement of one person to the other person.

For example if Mary has superannuation worth $200,000 and Joan has superannuation worth $600,000, a court might order that $200,000 be transferred from Joan’s superannuation to Mary’s superannuation to make their superannuation entitlements equal. Please note, this does not mean that a court will decide that all superannuation should be divided equally, the type of superannuation splitting order, if any, that a court might make depends entirely on the particular circumstances of each case.

Can my ex-partner claim maintenance from me?

The commonwealth laws allow the Family Court or Federal Magistrates Court to order one person pay maintenance (called spousal maintenance) to the other person. Whether a court might make an order for spousal maintenance depends on the particular circumstances of the parties.

What if we reach agreement about the division of our property after our relationship ends?

If you and you former partner reach agreement about the division of property after you separate, that agreement can be recorded in a Defacto Relationship Binding Financial Agreement.

Can we make an agreement about our finances before or during our relationship?

A defacto couple can enter into a Defacto Relationship Binding Financial Agreement at any time before they start living together or during their relationship to record how their property was to be divided if they separated.

Important note If an opposite sex defacto couple have a Defacto Relationship Binding Financial Agreement and they get married, the Agreement is automatically cancelled. In this situation a new Matrimonial Binding Financial Agreement must be entered into under the Family Law Act.


The Difference Between the Laws Before and After 1st Match 2009

The main differences between the laws that apply to defacto couples before and after 1st March 2009 are:

  1. Before 1st March 2009 the superannuation of each party was not included in the pool of assets to be divided.
  2. After 1st March 2009 the superannuation of each party is included in the pool of assets to be divided.
  3. Before 1st March 2009 neither party could be ordered to pay spousal maintenance to the other party.
  4. After 1st March 2009 the court can now order one party pay spousal maintenance to the other.
  5. Before 1st March 2009 if defacto partners, before they started living together or during their relationship, wanted to make a binding agreement about their finances and the division of their property if they separated, they entered into a recognised Cohabitation Agreement.
  6. After 1st March 2009 if defacto partners, before they start living together or during their relationship, want to make a binding agreement about their finances and the division of their property if they separate, they enter into a Defacto Relationship Binding Financial Agreement.
  7. Before 1st March 2009 if defacto partners wanted to make a binding agreement about their finances and the division of their property after their relationship ended, they entered into a recognised Separation Agreement.
  8. After 1st March 2009 if defacto partners want to make a binding agreement about their finances and the division of their property after their relationship ends, they enter into a Defacto Relationship Binding Financial Agreement.