It won’t come as a surprise to most that de facto relationships are increasingly popular in a country which has largely turned its back on Christian traditions such as marriage. In a recent Australian Financial Review article, linked at the end of this article, Duncan Hughes makes some interesting comments regarding de facto relationships and family law in Australia. Below are some takeaways from the article together with a clarification of certain legal issues it touches upon.
(1) The article provides Australian Institute of Family Studies statistics quantifying the rise in de facto relationships in Australia: “In the 30 years to 2016 – the latest statistics available – the number of de facto relationships rose threefold to about 18 percent of all couples. The number of registered marriages is further falling, with a dip of more than 30 percent between 2019 and 2020, the largest decrease ever reported by the Australian Bureau of Statistics.”
(2) The author notes that: “Both trends are exacerbated by COVID-19 lockdowns and a rise in the number of same-sex marriage relationships and previously divorced older couples who have no plans to remarry, experts say.”
(3) The article quotes Angela Harbinson, chief executive of The Separation Guide, who says “there has been a near 200 percent increase in the number of inquiries from couples seeking to split in the 12 months to January 5.” From a Western Australian perspective, it would be interesting to see if these increases are mirrored in this state, which has been much less impacted by COVID-19 related lockdowns than other states in Australia. Regardless, it is undeniable that the pandemic has increased pressure on relationships.
(4) Even before COVID-19 the separation rate amongst de facto couples was much higher than the divorce rate, so it follows the Family Court is increasingly dealing with de facto property settlements.
Whilst the author provides some interesting data regarding de facto relationships in Australia, there are a few legal issues raised in the article which need clarification:
Firstly, the article correctly observes that de facto partners have nearly identical rights to married couples upon separation. However, the Family Court of Western Australia only has jurisdiction with respect to de facto relationships that have existed for 2 years of more, unless there is a child of the relationship, or the applicant has made substantial contributions.
Secondly, contrary to the first paragraph of the article, separating couples have no “rights” to an “equal split” of real estate upon separation. Rather, the Family Court must consider all the relevant circumstances and decide what orders would be “just and equitable”. In some circumstances, this may mean the Court making no adjustments at all to the parties’ respective property interests (e.g. Stanford v Stanford; Chancellor v McCoy).
Thirdly, a few corrections need to be made to the author’s comments regarding transfer duty payable on transfers pursuant to Family Court orders:
- Such transfers are not “exempt” from duty but rather subject to nominal duty ($20);
- The transfer needs to be made pursuant to a particular Family Court documents (including consent orders and binding financial agreements);
- Nominal duty potentially applies, not just to a transfer of the house the parties lived in, but to all Australian real estate owned by the parties;
- The transfer must be to one of the parties, their children, or, if the couple were married, the trustee of a superannuation fund.
Fourthly, the article confirms another trend the family law team at HHG Legal Group has been observing – slowly, more and more people are using pre-nuptial agreements (technically called Binding Financial Agreements). However, couples need to keep in mind that pre-nuptial agreements must satisfy a number of formalities before they will be valid, including both parties have had independent legal advice. In addition, poorly drafted pre-nuptial agreements are liable to being overturned by a Court, even if all the formalities are satisfied, so it is important for couples to seek specialist legal advice if they would like a pre-nuptial agreement drafted.
So, in summary:
(1) Married and de facto partners all need prenuptial agreements, especially de facto partners;
(2) De facto relationships do not protect your assets (the old days are long gone);
(3) The law has evolved to recognise de facto property rights in much the same way it does in a marriage;
(4) As a society, we are left asking, ‘why is the de facto relationship separation rate so much higher than the divorce rate?’;
(5) January-February are divorce months. Sadly, family lawyers are rushed off their feet.
At HHG Legal Group we have a team of dedicated family lawyers who are ready to assist you with all your family law needs. If you have any questions in relation to the issues raised in this article, or if you are seeking family law advice, please do not hesitate to contact us by calling (08) 9322 1966 or contact us to arrange a consultation with a member of our family law team.
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