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Relationship Property

Relationship Property

When you’re in a serious relationship with someone, you may start spending each other’s money and sharing each other’s property. If you split up later, it can be complicated to figure out which property each of you own.

Another problem is that often, especially if you have children, one of you might be working and earning money whilst the other stays at home to keep house and look after the children. It wouldn’t be fair if the person who earned the money got to keep it all, while the person who worked to look after the house and children didn’t get anything.

Because of these problems, there are laws that say how the property will be divided if a serious relationship breaks up. Generally, all the property that either of you had accumulated during the marriage gets split in half when you split up.

My partner and I are separating, is there a law that tells us what happens to our property?

The Property (Relationships) Act tells people how owned property will be separated when partners in a relationship separate. It is based on the principle that both individuals in a relationship are equal. It takes into account that both financial and non-financial contributions to the relationship are important and that both people in the relationship should be treated equally. The division of property should take into account any economic advantages or disadvantages one person may have as a result of the relationship.

This means that if a couple applies to the Family Court because they can’t agree on the division of joint property after separation, the court will generally decide that the relationship property be divided evenly between both partners.

What is relationship property?

Relationship property is all the property that has been obtained by at least one of the partners in a relationship, during the period of the relationship. It could also be property that is used by both partners during a relationship. All relationship property must be divided between the partners when their relationship ends.
Relationship property will usually include:

  • the family home and chattels (e.g. the family car, any household furniture)
  • any property obtained by either partner before the relationship, intended for the common use or benefit of both partners
  • property owned jointly or in equal shares by the partners
  • property obtained by either partner during the relationship (except for gifts and inheritances)
  • income earned during the relationship
  • insurance on the partners’ relationship property
  • insurance on the partner’s lives, which has built up during the relationship
  • gifts or inheritances which have become mixed relationship property
  • property which both partners agree is relationship property
  • increases in the value of relationship property, income from it, or money from the sale of it
  • joint debt

When does my property become shared property?

If you get married or enter a civil union, or if you’ve been in a de facto relationship for at least 3 years, then almost all of your property becomes ‘relationship property’. In some de facto relationships, this can happen before you’ve been together for 3 years, for example, if you have children together or if one partner has made substantial contributions to the relationship and it would cause serious unfairness if they were not covered.

All relationship property is legally shared property. This means that if you and your partner break up, you have to split all the property each of you owns if it is classified as relationship property.

Should I get a prenup?

If you don’t want to share your property with your partner after a break-up, you can make a ‘contracting out’ agreement before you get married or before you enter a civil union. Contracting out agreements, or what you may know as “prenups”, state how you and your partner will divide your property after your break-up. These agreements only count if they are in writing and signed by both partners. Both you and your partner have to separately get advice about the agreement from a lawyer, and the lawyer you talked to has to watch you sign the agreement and sign it themselves to say that they have explained it to you first.

Do note though that even if you both sign a contracting out agreement, the court can still decide to cancel that agreement if they think the agreement would result in a serious unfairness to one of the people in the agreement.

My partner died with a will, what happens to their property?

If your partner passes away, you can choose whether you want to get half of all the relationship property, or to get whatever they leave you in their will.

My partner died without a will, what happens to their property?

If your partner died without a will, you can choose between getting half of the relationship property and getting whatever you would get under a law called the “Administration Act”. The Administration Act could give you all of your partner’s property, if your partner does not have any living children or parents when they passed away. On the other hand, it might only give you the right for personal chattels (up to $155,000) and one-third of the rest, if your partner does have children.

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