I am currently at a cross-road in life where my friendship groups are at differing stages of their lives. Some friends are spending Tuesday – Sunday at the local pub, some are battling with nappies and baby bottles, others are travelling Europe… whilst another friend is in the midst of wedding planning.
Although people may be at different stages of their “life-cycle” the same questions in relation to Family Law seems to crop up frequently and not only that, but more often than not they are laden with factual errors. In an effort to provide some clarity I have “de-bunked” some of the family law myths:
1. I don’t need a Will or Enduring Power of Attorney unless I own a house….
Incorrect. A house is not the only asset that is covered by a Will. There are other assets which may be of significant value that make up your estate, and other considerations that your Will can address, such as:
- What should happen to your other property that you own (car, shares, savings etc)?
- If you have minor children, who do you nominate as their guardian if both parents were to die?
- Are you agreeable to organ donation?
- Do you wish to gift specific sums to family members, friends or charities?
- Do you wish to be buried? Cremated? Does your family know what your preference is?
- If your superannuation or life insurance nominates your ‘legal personal representative’ to receive it, how do you wish the funds to be divided?
Without a Will, the way your wealth is divided upon your death is determined by a strict statutory formula – a division which may not be what you want.
If you were involved in an accident or fell ill, who would you want making the decisions about your health, finances, property and personal care when you aren’t able to yourself?
Having a representative/s appointed under an Enduring Power of Attorney which clearly indicates how you wish them to make decisions will give certainty and peace of mind to you and your family if the unexpected happens. This is especially important if you are appointing different people to make decisions on different matters.
Often when speaking to friends the attitude of “it won’t happen to me” crops up. In relation to this, I say that it is better to be “safe” than to be “sorry” as life events can come to a head at the most unexpected time.
2. But we are not de-facto because we do not live together….
Again. Somewhat incorrect. Often determining whether a relationship is “de-facto” will depend on the duration of the relationship itself. However, there are exceptions to this rule (for example having children). It should also be noted that although you may be de-facto it does not result in an immediate entitlement to the other person’s assets (or a 50:50 split as it is often thought by people). There are many factors that can influence the division of assets and it is often very circumstantial. Notably, same-sex couples also fall under the de-facto sections of the Family Law Act and are held to the same legal processes.
3. If we get engaged the woman immediately gets to keep the ring in the event that we split up….
Again, this depends on the specific arrangement reached. For example, if you were married the following may apply: if you enter into property settlement documents that stipulates who keeps the ring in the event of a relationship breakdown, the documents will determine what occurs. If no agreement exists, the court will likely make a determination with respect who can keep the ring. For more information in relation to engagement rings and who keeps them post-separation.
The “who keeps the ring” debacle becomes more difficult to quantify for de-facto and/or same-sex couples that were not married. Under these circumstances, the question of “who keeps the ring” is dependent on various factors and the recommendation would be to obtain specialised legal advice to understand your rights and obligations under the law.
4. What happens to Mr. Fluffy if we separate?
More frequently than not, pets are caught in the cross-fire of Family Law matters. In Australia pets are treated as “property” and therefore are included in the property settlement process of Family Law matters. If the matter ends up in Court (see: Downey & Beale), a Judge may look at the following factors in deciding who keeps the pet:
- Who purchased the pet;
- Contributions to the care of the pet;
- Financial contributions for necessities (food, medical, toys etc);
- Pet insurance payments (if applicable).
More often than not parties can come to an agreement in relation to the pet and have even been known to enter into a shared care arrangement for their furry friend. If you are separating and are worried about your pet it may be worthwhile to obtain legal advice about achieving the outcome that you seek.
5. We were de-facto but I have no assets so we don’t need to do a “Property Settlement” …
Again, this is very circumstantial but as noted above, “a house” is not the only asset that a person has.
For example, Bob and Jane have been dating for 7 years and have lived together and rented the entire time. They have now separated. Bob thinks that because there is no house that there are no assets of the relationship. However, during the relationship, he had accumulated significant superannuation which greatly exceeds Jane’s superannuation. Jane enabled Bob to accumulate the super by undertaking all the “housework” duties whilst he travelled for work. If it had not been for Jane’s support, Bob would not have grown his superannuation as much as he did. The superannuation is technically an asset and may be divided in a Family Law settlement.
The requirements surrounding a potential division of superannuation are strongly dependent on circumstantial factors of the relationship. A person is not “automatically” entitled to superannuation because they were in a relationship with someone. A Court would take into consideration multiple factors including contributions (both, financial and non-financial) and the duration of the relationship.
The last statement that I often hear people utter is that: “we are too young to have a family law matter…” I think that people need to consider that a family law matter can transpire at any age. You do not have to be married to face “family law” issues and it is crucial to understand that a “house” is far from the only asset that can be affected by a property settlement after separation. A settlement can include:
- Shares; and
- Other property.
If you read any of the questions addressed in this blog and thought to yourself “this might apply to me” it may be of great benefit to seek out advice and confirm what the law says in relation to your specific circumstances. Please call us on 02 6257 6477 or message us and we will get back to you.