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Companionship in Later Life and the Potential Legal Pitfalls

This article was written by Gina Dobson.

We tend to assume that couples in de facto relationships are more likely to be members of the younger generations. Despite this assumption, it is very common for people to enter into new relationships later in life (the desire for companionship could hardly be said to decrease as we age!). However, there are important legal matters regarding property that arise from these new relationships that need serious consideration. 

The law that governs the division of relationship property is the Property (Relationships) Act (“the Act”). Under the Act, when a de facto relationship ends there is a presumption of a 50/50 division of relationship property. This raises a number of questions. Firstly, how do you know if you have a “de facto” relationship? And secondly, what if you don’t feel that a 50/50 division is fair in your situation? 

Whether you have a de facto relationship or not depends on a number of elements that are set out in the Act. Firstly, the Act applies to de facto relationships of three or more years. But determining whether a relationship is de facto or not isn’t just limited to whether you share a bedroom, or what your financial arrangements are. The definition of what makes a de facto relationship is very broad. This is to ensure that the law can allow for the differing ways that people live in their relationships. None of the elements listed in the Act are essential to a de facto relationship – they are all just considerations for the Court to take into account. 

It is not surprising that the 50/50 division can come as a shock and cause huge upset for people. There are many reasons for this. Perhaps you or your partner have children from previous relationships that you wish to provide for. One of you may bring substantial assets, or debts, to a relationship. Or you might have ideas of how you would like specific assets to be distributed on your passing. 

Fortunately, the Act provides an alternative to the 50/50 division scheme in the form of Contracting Out Agreements. In these Agreements, you can set out the rules you would both like to apply to your property if the relationship comes to an end because of separation or death. Having a Contracting Out Agreement in place ensures that there is no misunderstanding on what you both want to happen after you die.  You should be aware that as well as completing an Agreement, you may also need to update your Will so that the terms and conditions of your Agreement are reflected in your Will.  

Contracting Out Agreements are subject to specific requirements under the Act – one of which is that both parties must receive independent legal advice before the agreement is signed. At Harmans we have a specialist Family Law Team and a specialist Seniors Team who can assist with Contracting Out Agreements and Estate Planning. Give Harmans a call on 352 2293 to discuss your legal requirements.

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