Dating or de facto? Why it matters for your finances
Did you know not all unmarried relationships are de facto relationships? Unless you've officially registered your de facto relationship (yes, that's a thing), it can be tricky to determine when a couple goes from simply "dating", or seeing each other casually, to a full-blown de facto relationship.
You may be wondering, what difference does it make? It can actually make a significant difference if the relationship breaks down. Even if you're not married, you may be able to make a property settlement claim under the Family Law Act. But the Act will only apply if your relationship is determined to be de facto.
So, what exactly is a de facto relationship?
It's technically defined in the Act as a couple living together on a "genuine domestic basis".
But, it's not quite as simple as that.
The legislation makes it clear that to determine whether a relationship is a de facto relationship, you have to consider all the circumstances of the relationship. This question has recently come before both the High Court and the appeal court, and reaffirms it is not just one factor that will determine a relationship as de facto or not.
So, what sort of circumstances will the Court take into account when deciding if a relationship is de facto?
Here's just a few:
- How long have you been in the relationship?
- Are you living together and, if so, for how long?
- Is there a sexual relationship?
- Is one partner financially dependent or are you financially dependent on each other? Is there a financial support arrangement in place?
- Who owns the property?
- Are you both committed to a shared life?
- Is the relationship registered as a de facto relationship?
- Are there children in the picture?
- Are you known publicly to be in a relationship?
While none of these factors alone is an essential feature for a de facto relationship to exist, the Court will weigh up all of these circumstances to determine one way or another, what sort of relationship it is.
Battles about whether a relationship is a de facto relationship are usually difficult and complicated, and will likely involve gathering detailed evidence from the couple, their friends, family members or associates (who may, understandably, be reluctant to get involved).
It's also helpful to have as much documentary evidence as possible, which may be everything from bank records and documents lodged with government authorities, through to text messages, telephone records and travel bookings. Of course, this does not always exist.
Determining whether a de facto relationship exists, and the ability to bring a property claim within the family law jurisdiction, can mean a substantial difference in potential outcomes for both parties. For this reason, the threshold question of the status of the relationship is often hard-fought.
It's therefore incredibly important to seek careful and strategic advice as to the possible outcomes, risks and commercial benefit of pursuing such a claim.
It may also be a good idea to get strategic advice early on in a relationship, so you know what steps to take, or avoid, to eliminate the possibility of a future argument about whether a de facto relationship exists.
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