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Contract for De-Facto Relationships

When a couple hits the second anniversary, most assume that they are already in a “De-Facto” relationship, but it may not be that straightforward. Explained here that de-facto relationships have almost the same rights and claims related to Family Law regarding properties, rights to their children, and financial settlements.

Below, we’ll define de-facto relationships, what happens when things go south and what you could do before the relationship breaks down.

What is a De-Facto Relationship?

According to the Family Law Act, a de-facto relationship consists of two people that live together as cohabitants on a domestic basis. The couple is not in a civil union or married to each other. Hence, individuals that are legally married or related to each other by family are not considered to be in a de-facto relationship.

Individuals who plan to enter a de-facto relationship by moving in together should understand the implications of this arrangement. This is also true for couples that have already moved in together but have not reached the two-year mark.

Before entering into a de-facto relationship, it may be wise to get Legal Documents like a BFA or a Binding Financial Agreement, but we will get to that in a little while.

What Happens If The De-Facto Relationship Breaks Down?

Sometimes, things may not go well with the de-facto relationship. In this case, the couple or one of them has every right to have their financial assets and properties settled under the Federal Circuit Court. If they have children, they can also settle the custody matter in a Family Court just like how divorced couples would.

There are four gateways or critical criteria that are used when assessing a de-facto couple whenever they claim property settlement as outlined by Family Law. They include:

  • The duration of the de-facto relationship should be at least two years
  • Whether or not a child was born from their de-facto relationship
  • Their de-facto relationship has been registered under a State/Territory law
  • And lastly, significant contributions should be made or is being done by one party; failure to create an order would lead to a grave injustice.

If the relationship is under at least one of the categories mentioned, then they can apply to the court to settle their properties. To avoid the court process, here is where the BFA comes in.

What Is A BFA?

BFA stands for Binding Financial Agreement and is a legal contract that sets the division of properties and financial assets between two persons in a relationship. They can either be a married couple or a de-facto couple.

The de-facto couple can draft their own BFA depending on the stage of their relationship. This is whether they are just getting into the relationship, during the relationship, or right after their relationship breaks down. Binding Financial Agreements can help couples divide their assets and properties if their relationship breaks down. It also gives both parties the right to a court order.

The BFAs, however, cannot be used to establish or state that the couple is in a de-facto relationship per the law. This is only used by the judge when determining their relationship when it is in question.

Conclusion

Although a de-facto contract is intended to transfer property between persons in a relationship, it can somehow be defective if there is no consideration. It remains legally binding given that it does not violate any public policy or law.

Steven Giglio

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