Q:What is the major change to the law?

A:The major change is extending existing law from married couples to de facto and same sex couples.

Q:What is a de facto relationship?

A:Living together is not the sole criteria as many understand it to be. Other factors include the length of the relationship, whether or not a sexual relationship exists, degree of financial dependence or inter-dependence, whether property is jointly owned, the degree of mutual commitment to a shared life, care and support of children and whether or not others see you as a couple. It is not necessary to achieve all of the above criteria as each situation is judged on its own merits.

Q:How long do you need to be together for the law to apply?

A:The presumption of equal sharing commences after three years of a marriage or de facto relationship. Although the new law comes into effect on 1 February 2002 you do not calculate the period of the relationship from that date, you look to the date when the relationship commenced.

Q:What happens if I lived in a defacto relationship and then got married?

A:Under the old law if you were married the three year period equal sharing would commence from your date of marriage. Under the new law you would add together any period of a de facto relationship with the period of marriage.

Q:What property is covered by the new law?

A:The majority of property is now considered after three years to be relationship property, eg. the family home, home contents, motor vehicles etc, and any property acquired by you after the relationship began. The exceptions include inherited property, superannuation policies acquired before the relationship commenced, and property owned before the relationship began. Even then, if you and your partner or spouse were to live in an inherited home the new law would apply. The only way you can be sure to protect pre-relationship and inherited property is with an agreement.

Q:If we enter into an agreement will the property I keep for myself under that agreement be protected from a claim?

A:An agreement is now more effective in protecting your interests. Under the old law it was becoming increasingly common for agreements to be set aside as being unjust. The new law requires that the party seeking to set aside the agreement must show that a serious injustice would occur if the agreement is not set aside.

Q:What if I have property in trust?

A:The new law now allows a Court to require payments to be made from a trust in circumstances where property outside of the trust is insufficient to meet the obligations of a spouse or partner. This only arises where relationship property is held in trust and this has the effect of defeating a claim of a spouse or defacto partner. How effective your trust would be depends upon when the trust was formed and when you commenced your gifting programme.

Q:What happens if my partner or spouse were to die?

A:Under the old law a claim could not be made after a spouse had died. The new law allows a claim to be made by either a spouse or de facto partner. This is in addition to rights under the Family Protection Act (commonly known as contesting a Will).

Q:Can future earnings be claimed?

A:No, not under the Property (Relationships) Act. There is an ability for a Court to recognise situations where a party has given up their career to raise a family and support the other spouse or partner in their career. In that case, the Court could divide property other than equally, but the bigger share comes out of the property accumulated during the relationship, not in respect of future earnings.

Q:When should I contract out of the Act?

A:Common reasons to contract out of the new law include:

• To protect property which has been inherited or acquired prior to the relationship;
• To protect your estate for your children;
• An agreement will give you greater certainty in the event you were to separate or one of you were to die.

Need to know more? Please contact  us at Glaister Ennor.

The information on this web site is of a general nature only. Readers are advised to establish the applicability of information in relation to specific circumstances and not to rely solely on the information provided here.