De Facto Relationships and Pre-Nuptial Agreements

De Facto spouses ("domestic partners") can now apply through the Family Law Courts for court orders on all matters in dispute regarding their property, children or spousal support if they have separated after 1 March 2009.

What constitutes a "De Facto Relationship" is a complex matter when it comes to the legal interpretation. In very general terms it would apply to couples that have lived together for a minimum of 2 years, or in cases where it is not that long but a child of the relationship is born or one of the parties can show substantial contribution to the assets, then the dispute can come under the jurisdiction of the Family Law Courts.

Question: What can De Facto spouses or engaged persons do if they do NOT want to their financial relationship covered by these laws in case of separation? Answer: Make a "Binding Financial Agreement"!

It is possible for a couple to make it clear that they do not want the new laws to apply to their relationship and make their intentions legally binding. Couples can make an agreement about how they will distribute their property if their relationship was to break down. These are called "binding financial agreements" ("like pre-nupts") and can be entered into at any time provided both parties have obtained independent legal advice before signing to ensure in order for the written agreement to have any binding effect.

Binding financial agreements can be made before entering into a relationship or during a relationship (as well as after separation). Some of the terms put in a binding financial agreement may include putting a quarantine on certain assets -away from any claims that could otherwise have been made by the other spouse, and cutting out spousal maintenance. With all other assets built up together, the agreement could mention that everything else is up for grabs under the usual laws if separation occurs, or it goes 50/50 or whatever else the couple will agree to put in the binding financial agreement.

This method of asset protection is often far better than simply transferring a property into another family members name, solely for the sake of keeping it out of the other spouses target range for any future claims. The Family Law Courts have power to set aside such transfers anyway (especially if they were really only designed to defeat the spouse's interest and/or the transaction is a sham). A binding financial agreement however can be upheld and if necessary enforced by the Family Law Courts provided that it meets all the correct legal criteria to make it binding.