There’s nothing more exciting than moving into a home with the person you love. It’s magical, yet also potentially costly.
Many couples still think living together without marriage protects them from the same potential financial liabilities as legal spouses, but that’s not true.
9honey spoke to family lawyer Cassandra Kalpaxis, founder and director of Kalpaxis Legal, to find out how couples can protect themselves ahead of making the big move.
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“De facto and marriage is treated the same,” Kalpaxis tells 9honey. “It’s the same thing now under the Family Law Act.”
That is for couples who have lived together for a minimum of 12 months, although the court still has discretion within this period if assets have been pooled and couples are just shy of having lived together for a year.
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Kalpaxis recommends all couples, regardless of whether they plan to live as a de facto couple or legally wed, come to a financial agreement with the help of an accountant and a lawyer.
Agreements that haven’t been properly written with the help of professionals are often “not worth the paper they have been written on.”
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These agreements should be revisited approximately every year or when the couple’s circumstances change, such as the addition of children or the purchase of joint assets.
They still may not be 100 per cent foolproof, however will be taken more seriously if these steps have been taken.
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“Seeing an accountant to structure things when you’re setting things up is essential. And seeing somebody who has the knowledge and the skill set for estate planning and setting things up under the family law space is relevant,” she explains.
When a couple breaks up the court will take into consideration the following facts set out in Stanford v Stanford heard in the High Court in 2012 to ensure a financial agreement is “equitable and just.”
1. When the relationship commenced.
2. Who came into the relationship with what assets and what liabilities?
3. Any support being received from either party from parents.
4. Who did what during the relationship?
5. Future needs of the parties.
She warns attempts to hide assets aren’t looked upon favourably in court.
Still, there are cases when Kalpaxis finds herself accepting clients who walk away from potential financial settlements when they are potentially in danger due to domestic and family violence.
“I am seeing what has to be called out as an increase in coercive control, particularly amongst women who are walking away from their entitlements because they are just too frightened,” she says.
“Particularly in intimate partner violence space because of the control that’s been exhibited during a relationship.”
Before moving in together Kalpaxis advises couples to take the following “not sexy” but “crucial” steps.
1. Understand how your partner spends money.
2. Get on the same page about assets.
3. See a family lawyer to ensure the agreement is fair and equitable.
4. Visit an accountant to make sure the structure is sound and understood by both parties.
And from her experience, she feels staying in a relationship for the sake of children is a mistake.
“The social science research that is coming out has found children who are forced to stay in high conflict environments have their social development, their physical development, impacted,” she says.
Kalpaxis is “passionate about educating as many people as I possibly can about safe, respectful relationships” to prevent acrimonious and potentially dangerous financial disputes following a breakup.
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