Tag Archives | relationship property

Relationship Property Basics

BrideGroomRelationship Property Basics

Statistics show that at least a third of marriages and de facto relationships fail. Being aware of the financial consequences of the end of relationship means you can put in place strategies to protect the property you acquired before the relationship and protect your rights to a share of property acquired during the relationship.

Under current law, there is a general rule, with few exceptions, that if a couple are deemed to be living together for at least three years, there is an equal division of relationship property if the relationship ends. Relationship property includes the family home, even if the family home was acquired before the start of the relationship, as well as other family chattels such as boats and cars or even pets. It can also include superannuation accumulated since the start of the relationship. Separate property, which remains the property of the individual, includes businesses or investments acquired prior to the relationship, gifts and inheritances held separately.

Relationships sometimes end through a death. The surviving partner can choose between the provisions of the will and a relationship property claim. This is particularly important to note when it comes to second relationships. A surviving partner may be entitled to half the value of relationship property which could be significantly more than what was provided for under the will.

Trusts and ‘contracting out agreements’ are often put in place at the start of a relationship to establish a fair means of dividing property on separation or death. It is very important to review these arrangements during the course of a relationship as, while they might be fair at the start, they may become unfair as the relationship matures. Sound independent legal advice is required, particularly if you have significant personal assets or if you are in a second relationship.

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The End of a Relationship

The End of a Relationship

It has been said that if breakups never existed the music industry would go bankrupt! Unfortunately, they are a fact of life. Most people endure at least one in their lifetime; some lurch from one to the next, but no matter how often you experience a breakup it is still a very painful experience. Dealing with financial matters at such an emotional time can be very stressful, and it is better to reach an agreement with your partner while you are still a happy couple on how your property will be divided in the event you part. This should be done with the assistance of your solicitor. The key matters to consider are

  • What property has each partner brought into the relationship?
  • What is separate property that is to be preserved for each partner?
  • What is relationship property that is to be divided?
  • How is the relationship property to be divided?

In the absence of a property agreement, the Property (Relationships) Act sets out a default formula for how property is divided when a couple separates or one dies. In general, for couples who have been in a relationship for three years or more, the couple’s property will be divided equally.

It is important that you get legal advice before reaching any agreement with your partner so you know what your rights are. However, going into battle for every last cent of your entitlement may leave you worse off after paying your legal bills, so be flexible.

Debts need to be shared as well as assets and this can include credit cards and hire purchase. As soon as your relationship has ended, make sure you protect yourself by freezing or closing every joint account, credit or store card or other debt arrangement.  Be safe, not sorry!

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