Property Settlements within de facto relationships
A long relationship does not automatically entitle you to a property settlement
Many people would think that after 27 years in a de facto relationship, it would be a given that the parties would be entitled to a property settlement. In fact, prior to writing this article, I did a short poll amongst my friends as to whether they would expect a property settlement after 27 years. These people were accountants, police officers, other lawyers and retirees. All of them were of the belief that after 27 years in a relationship, the parties would be automatically entitled to a property settlement.
This here shows just how important it is to speak to a family lawyer when separating from your spouse or significant other. There are circumstances which would dictate that after 27 years, neither party would be entitled to a property settlement. When I told my friends this, they were amazed and wondered how it could be fair.
In a recent case, the parties were in a same sex relationship since 1982 and were of similar ages, being in their 50’s. At all times during the relationship, they lived together, with various properties being bought and sold over the duration of the relationship. They each performed repair and maintenance work on the properties and at times, they both worked in a family business. In other words, their relationship was the picture of a “typical” relationship.
What sets this relationship apart from the rest, and the reason for the decision in this matter are the finer details. For example, while they each lived in the same homes, the houses were purchased by either partner individually, with that person being solely responsible for the expenses on the property. Further, they never intermingled their finances, nor did they ever make any joint purchases or did they have to account for the other person about their individual spending, to the point that neither party was aware of the other’s financial circumstances.
When you really examine the circumstances of this relationship, despite them being in a committed relationship for such a long time, when you look at their finances it was as if they were two separate individuals. Yes they would buy each other dinner when they went out and would buy gifts and things for each other, but when it came to the big purchases, whether it is a car, a trailer, a House or property, they each made their own decisions without consulting the other and without the other person’s details being used.
As for the renovation works, neither party provided any evidence to the Court that the renovations had increased the value of the respective properties. Accordingly, it was found that neither party had contributed any equity to the other’s properties. Drill down even further and it was revealed that while both parties had executed Wills, neither had left any property to the other, instead leaving their estates to their own respective families.
When considering the law, in circumstances where there was no property held in joint names (and what was purchased jointly was divided at settlement), the decision the Judge needed to consider was whether it was “just and equitable” to make a property settlement order altering the parties interests in the properties. Considering the total net asset pool was $2,419,055, this was a decision that needed careful consideration by the Judge, as person A had total net assets of $720,391 in their sole name, while person B had $1,698,664 in their sole name.
In making their decision, the Judge noted that there were several salient factors which assisted in the determination of whether it was just and equitable to make an order altering property interests. The Judge broke these factors down into different categories, including the nature of the parties, the acquisition of the properties, the direct financial contributions to the others homes (of which it was noted was minimal), indirect contributions to the other’s properties, the sharing of their day to day expenses, the separation of their finances and financial independence, the lack of future plans or goals and the lack of knowledge of the financial situation of the other. In weighing up all of these factors, the Judge concluded that it was not just and equitable to alter the property interests of the parties and ordered that each party retain the assets in their own names, meaning that person B received almost two-thirds of the net asset pool.
This case highlights the importance of consulting with an experienced family lawyer prior to entering into a property settlement. Only a careful examination of the specific circumstances of your situation by an experienced family lawyer will determine your entitlements, not only to determine if you are entitled to a property settlement, but if you are, what your entitlement is likely to be.
If you or someone you know is separating, make sure to book in to speak with one of our family lawyers to ensure that you receive the correct advice, first time. It could save you thousands.